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    Food Industry M&A Action Up: Food Institute

    ELMWOOD PARK, N.J. -- As the recent news stories regarding Whole Foods' purchase of Wild Oats and A&P's talks to buy Pathmark show, food industry mergers and acquisitions are once again on the rise, according to a report from the Food Institute here.

    ELMWOOD PARK, N.J. -- As the recent news stories regarding Whole Foods' purchase of Wild Oats and A&P's talks to buy Pathmark show, food industry mergers and acquisitions are once again on the rise, according to a report from the Food Institute here.

    In 2006, 348 mergers and acquisitions were completed in the industry, with another 102 announced, but not yet completed, by the end of the year, according to the report, "Food Business Mergers & Acquisitions 2006."

    Activity last year rose 7.7 percent from 2005, although it was still 13.6 percent below the total five years ago, said the nonprofit trade association, which has been tracking merger and acquisition activity for over 25 years.

    Food processors made up almost one-third of the total number of mergers and acquisitions completed last year, while investment firms and banks accounted for nearly one-fifth of such deals during the year, the publication found.

    Other categories that saw significant increases in mergers and acquisitions in 2006 over the prior year were restaurants and retailers, particularly supermarkets and convenience stores. Supermarket mergers and acquisitions increased to 21 completed, with an additional 15 pending, up from nine completed deals in 2005. Purchases completed by convenience stores came to 32, plus another 10 pending closure, up from 10 transactions completed in 2005.

    "Investment firms and banks were the winner in this year's race for mergers and acquisitions," observed Food Institute research and education director Danielle Breuel in a statement. "Transactions carried out by companies in this category clearly contributed to the overall increase in food business mergers and acquisitions in 2006. Purchases made by restaurant firms and supermarkets also played a significant role in the overall increase, with activity in these sectors of the industry bouncing back from a lull in 2005. The magnitude of consolidation among food retailers could continue in 2007, with two key transactions already announced: Whole Foods Market, Inc. agreed to acquire natural and organic foods retailer Wild Oats Markets, and warehouse store operator and foodservice supplier Smart & Final Inc. entered into a definitive merger agreement to be acquired by an affiliate of private equity firm Apollo Management, LP."

    The publication contains a listing of merger and acquisition activity in over 25 different categories, including food processors, restaurants, retailers, and investment firms and banks. As well as the specifics of each of the deals that took place last year, "Food Business Mergers & Acquisitions 2006" offers an overall comparison of merger and acquisition activity over the past five years.

    To learn more about or to preorder "Food Business Mergers & Acquisitions 2006," please contact Breuel at (201) 791-5570, ext. 216, or [email protected].

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