Following a period in which the consolidation pace among floriculture companies reached new heights, current market circumstances have stabilized the pace of consolidation.
Due to increased energy prices, supply chain problems, low consumer confidence, a decline in available funding for M&A transactions, and uncertainty with regard to the short-term market outlook, companies were more hesitant to engage in M&A, and the general market cooled down.
However, floriculture companies have continued to form strategic partnerships with both industry peers and financial investors. Underpinning these dynamics, Oaklins have identified 49 transactions in the floriculture sector during the second half of 2022, which is lower compared to the 56 observed during the first half of the year but still considerably higher compared to the 43 observed during the second half of 2021.
Based on current market conditions, Oaklins expecta the M&A market to remain relatively slow during the first half of 2023. However, as individuals, organizations, and global markets become accustomed to the new reality, Oaklins expect to see an increase in M&A activity in the second half of 2023.
While the floriculture industry has been more affected by 2022's challenges than other sectors, M&A activity remained relatively stable, showing that the consolidation trends in this sector are robust. Therefore, Oaklins expect to see a continuation in the acceleration of M&A activity in the near future. Frank de Hek, Oaklins' horticulture specialist.
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