The UK has continued to see strong M&A activity in the food and drink sector so far this year, with activity hitting an eight-year high during the first quarter of 2025. However, there are also concerns that this positive momentum could be disrupted by uncertainty surrounding Donald Trump’s trade tariffs.
According to new data from Grant Thornton, deal volume in the sector during the first quarter of the year matched the 40 transactions recorded during the final quarter of 2024. UK domestic M&A in the sector, meanwhile, was the strongest since Grant Thornton began tracking activity during the first quarter of 2017.
This was driven by strong activity among private equity buyers, who continued to increase their interest in the sector, and trade buyers seeking to boost their portfolios and bolster their supply chain capabilities.
Private equity firms made 11 direct investments during Q1 2025, compared to 10 in Q1 2024 and nine in Q4 2024. There were also a number of deals involving private equity-backed trade buyers, such as the acquisition of Whitakers Chocolates by LDC-backed Bramble Foods.
The positive momentum seen during the first quarter of the year continues a trend that developed last year, as dealmaking in the sector saw a strong recovery during 2024. According to research from Oghma Partners, there were 151 deals in the food and beverage sector last year – a near-30 per cent increase from 2023.
Higher levels of activity seem to have continued into the second quarter of 2025, with a number of high-profile deals, including Unilever’s £230 million acquisition of Wild, Müller’s £100 million takeover of Biotiful and the merger of Greencore and Bakkavor.
According to Grant Thornton’s Head of Consumer Industries, Nicola Sartori, the dealmaking activity seen so far this year is even more notable given the uptick in dealmaking seen towards the end of 2024, when many sellers were rapidly closing transactions prior to the increase in Capital Gains Tax. Sartori claims that, without this, it is likely that the first quarter of 2025 “would have seen an even higher volume”.
However, despite the momentum that dealmaking in the food and drink industry has gathered during 2024 and 2025 so far, Sartori warns that the second half of the year could be impacted by volatility in global markets, as mounting economic uncertainty begins to take its toll on M&A.
Sartori stated: “The geopolitical and economic uncertainties we saw in April haven’t impacted volumes yet, but there may be a more tangible effect to come later in the year.”
“The ongoing uncertainty around tariffs means the F&B sector will need to adapt to the increased costs of importing packaging, ingredients and machinery. Market volatility as a result of policy uncertainty has also impacted appetite for IPOs, particularly in the US.”
Take a deeper look at the trends that are driving 2025's wave of food and drink M&A
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