Blasé Capital M&A MEALS

In the first nine months of this year, the country witnessed more than 100 merger and acquisition (M&A) deals which, according to a media report, is the highest in the past four years. What is surprising, however, is that the largest share was accounted for by the food and beverage (F&B) sector, where the sizes of the deals are generally much lower than, say, energy, tech, and asset-heavy ones. This was followed by apparels, another lightweight category. In terms of value, the consumer sector deals were more than Rs 20,000 crore, with almost 75 per cent in F&B. One of the reasons may be that the India growth story has shifted from demand to consumption, largely due to personal tax and GST changes. Hence, consumption-led sectors like F&B have emerged in the limelight. In the recent past, thanks to GST 2.0, private consumption has zoomed.

Apart from the macro scenario, where consumption may lead the growth story for a few years, the F&B sector is undergoing radical changes. From an annual base of $120 billion in revenues, it may add another $100 billion over the next few years, and grow at a compounded growth of 6.5 per cent. Several factors like rapid urbanisation, and higher demand for convenience food can explain the growth pattern. The rise of online and speedy food delivery, especially of those that deliver within minutes, is influencing how Indians eat, and discover food and flavours. Hence, both Indian and global investors have set their eyes on growing and profitable firms that may be up for grabs, or need money to expand and grow. Experts expect the M&A activity in F&B to go up, or remain at current heightened levels over the next few years, even as delivery start-ups deliver financial performances. These are exciting gobbling times.

Media reports highlight several big-ticket deals in progress, and which were done this year. Last month, the Reliance Group acquired a stake in a Chennai-based firm. The Indian arm of a Norwegian parent is eyeing M&As, according to an agency report. “Its chief executive told Reuters that the company is banking on the growth of quick-delivery platforms, and rising demand for ready-to-eat meals to drive double-digit revenue growth.” An Indian firm spent nearly $500 million to acquire a whisky brand from a renowned foreign liquor company. Thus, the action is not restricted to the foreigners, who eye the growth of an Indian middle-class that mirrors the west, and apes the latter’s lifestyles. Indians are interested in foreign brands. It may be a survival tactic too; faced with the certainty of foreigners’ entry and/or expansion, Indians feel the need to secure their perimeters.

Investment firms, private equity players, and others have joined the action. Vixar, along with a prominent investor, and HDFC Asset Management, purchased a stake in The Belgian Waffle Co. for almost INR800 crore. “The investment consortium will become the controlling shareholder, (together) owning the single-largest block,” states a media report. Several funds have indicated preferences for scaled-up and brands-led firms in the F&B sector. One of the major activities among these firms related to the iconic Haldiram. According to a media report, “Temasek, IHC, and Alpha Wave Global acquired minority stakes… valuing the company at $10 billion while ChrysCapital took a controlling stake in Theobroma Foods. Devyani International, which operates KFC in India, acquired a majority stake in Sky Gate Hospitality, the parent of Biryani by Kilo.” Thus, it is not about established players and start-ups. Established brands are taking over other renowned ones to up their offerings.

Globally, the opposite trend has set in. “Early 2025 saw caution due to macro factors, but confidence grew by quarters 2 and 3, with deal flow picking up, especially in beverages and wellness. Buyers are taking a disciplined approach, focusing on strategic fit, and long-term growth rather than just volume. But expect continued interest in wellness, plant-based, and functional foods/drinks, with major players using M&As to adapt to changing consumer tastes, and strengthen market positions,” states an assessment. According to Kroll, “In Q3-2025, 72 transactions were announced… representing a 20 per cent quarter-on-quarter increase, and second straight quarter of rising deal volume. This recent ramp-up in activity is encouraging, as it indicates a revived confidence… following a 10-year low in H1-2025. For the trailing 12-month period ending September 30, 2025, 258 transactions were announced… which marks a 10.4 per cent decline.” Almost four-fifths of them were strategic.

Such patterns were quite distinct from the Indian scenario, where the focus is on expansion, with a risk-taking taste. Brands wish to grow through the inorganic route, and cover competitive bases through brand guardrails. The market is in the growth phase due to several factors, and hence the criticality is of acquiring market shares across segments, and even diversifying in related areas. Brand acquisition, platform purchases, revenue growths, and tactical buying is more important than thinking only in terms of strategy. Only after this frenetic M&A activity is over in the next 3-4 years will firms take stock of what is in their baskets, and put on the strategic hats. At that stage, they will decide what to sell, and what to retain, which may fuel another round of strategic deals.