1、Beauty and personal care:resetting the stage for M&APhoto by Stefanie Noll Kearney,DsseldorfThe beauty and personal care(BPC)sector has been an attractive target for mergers and acquisitions(M&A)throughout the past few decades.Benefiting from favorable macro trends such as the increasing focus on he

2、alth and well-being and rising levels of consumer engagement,it has delivered high growth rates and very healthy gross margins for many years.This in turn has led to sustained investor attention and higher transaction volumes than other consumer sectors.But the sector is also facing structural shift

3、s,including fundamental changes in marketing and what defines a brand,new consumer preferences,emerging digital business models,shifting geographic dynamics,and operational hurdles.Against this backdrop,M&As are an important instrument and catalyst enabling companies to rapidly adapt and strengthen

4、their portfolios.However,the M&A track record in the BPC industry is far from positive,with many deals delivering limited or no value creation for shareholders.This track record,in combination with high interest rates and volatile corporate valuations,creates an environment in which a clear M&A stra

5、tegy is paramount.The ability to quickly identify and integrate attractive businesses or smoothly spin off businesses that are no longer worth pursuing will be a decisive factor to outperform competition.We predict the industrys M&A activities will accelerate over the next couple of years with inves

6、tors focusing on smaller investments and selective mega deals.We also predict some changes to the underlying deal rationale and that investors will be a lot more conscious about how they integrate acquired companies.Looking back:historical M&A activity Transaction volumeThe past five years in the BP