Retail M&A driven by pandemic trends

Long-term consumer behavior triggered by the pandemic continues to catalyze deal activity

While initially hit hard by the 2020 outbreak of the COVID pandemic, global retail M&A rallied throughout 2021 and the start of 2022. A total of 802 retail deals took place in 2021—the highest annual volume in five years.

This healthy activity has continued into 2022, with 144 deals valued at US$25.19 billion announced in the first three months of the year—up 43% in value compared to Q1 2021, while accounting for 29 fewer deals.

Even before COVID-19, department store sales had declined as consumer behavior shifted. Physical stores became especially vulnerable due to the sudden lack of footfall and a heavy shift to e-commerce during the pandemic, which has led to department stores attracting attention from activist funds.

It’s no surprise that the largest retail deal of 2022 so far is Acacia Research’s US$13.8 billion takeover offer for US department store chain Kohl’s.

Luxury brands seek global presence

The global luxury goods market is returning to growth following a period of pandemic-related uncertainty and is expected to reach US$430 billion by 2025.

This has led to plenty of investor interest in the sector, as seen in the merger between French fashion house Lanvin Group and blank check company Primavera Capital Acquisition Corp. (PCAC), valued at US$1.25 billion. The merger with PCAC—a SPAC backed by Chinese global investment firm Primavera Capital Group—will see Lanvin listed on the New York Stock Exchange.

The deal reflects how luxury brands are bouncing back post-pandemic, offering significant growth opportunities for investors looking for global reach. The Lanvin deal, in particular, was driven by surging luxury consumption in Asia, and is aimed to expand Lanvin’s presence in this key market.

Convenient food is hot property

The food retail sector is another where investors are seeking profit. In February, UK-based meal-kit provider Gousto completed a US$230 million secondary placing led by SoftBank Vision Fund 2.

As was the case across the food delivery industry, Gousto saw its sales soar amid the pandemic as consumers increasingly ate at home. The trend can also be seen in the boom in funding for rapid grocery delivery apps.

The first quarter of 2022 saw Turkey-based Getir raise a US$768 million Series E round with participation from venture capital funds Sequoia Capital and PE firm Tiger Global, among others. Competitors including US-based GoPuff and Germany-based Gorillas have also attracted large investments.

Green hydrogen boosts Net Zero efforts

Driven by the global Net Zero agenda, hydrogen refueling stations are an area within the retail sector set to attract increasing attention from investors. The use of “green hydrogen” in transportation is seen as central to the global energy transition, as it reduces dependence on extractive fossil fuels.

In March, a consortium led by Hy24, a clean hydrogen infrastructure investment platform based in Germany, invested US$121 million in hydrogen station operator H2 Mobility. The investment includes US$41 million from existing shareholders, such as Air Liquide, Daimler Truck, Linde and Shell.

The deal is a significant boost to Germany’s hydrogen refueling infrastructure, helping H2 Mobility to reach its target of expanding its network to 300 stations by 2030.

Encouraged by regulation such as the European Union’s Fit-for-55 plans, Germany is establishing itself as a center for hydrogen refueling technology. The investment also supports the European Commission’s efforts to implement the Alternative Fuels Infrastructure Regulation (AFIR) to expand Europe’s network of hydrogen refueling stations.


Dealmaking within the retail sector continues to be centered around winners and losers of the pandemic, with M&A becoming an indispensable tool to stay in tune with consumer behavior. An increased focus on sustainability issues also is driving investments at the lower end of the market.

Businesses that saw sales plummet during the pandemic—such as department stores—are seeing increased attention from investors, and particularly shareholder activists, who see opportunity to improve their business model and boost profits.

With these trends driving activity, and pandemic-induced changes in consumer behavior likely to endure over the long-term, there is every reason to expect retail dealmaking will remain active throughout 2022.

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