Wholesale & Distribution

Wholesale & Distribution

Mergers and acquisitions may be able to help the WD industry move from neutral to drive mode. As evidenced by increased WD M&A activity, certain areas are beginning to realise its potential. Despite this, few big firms are pursuing significant, large-scale acquisitions that may assist distributors enhance their position with upstream and downstream partners and provide a boost to their market development.

Market View

  • Distributors would likely need to approach the M&A process in a fundamentally different way than they have in the past, shifting from a focus on small or niche transactions to larger, more strategic mergers that bring scale advantages and enhance channel position. Furthermore, businesses must plan and execute transactions in such a way that their investments are both economically and strategically justifiable.
  • The motives for engaging in M&A for WD players may be more pressing than merely tapping into development prospects. Higher inventory levels, poorer pricing and profits, and a loss of autonomy for WD players may occur from an imbalance in market concentration compared to other channel partners. These factors may contribute to the need for higher-value/transformational M&A among WD firms.

Market Outlook

Growth in financial buyers

Greater M&A Activity

Industry disruption at either end of the value chain may encourage distributor mergers and acquisitions.

Increase in cross-border transactions