IN Brief:
- European food, beverage, and agriculture M&A reached 418 transactions in the first half of 2026, up 25.1% year on year.
- Financial sponsors increased their share of activity, with new platform investments more than doubling from the previous first half.
- Ingredients and functional nutrition continue attracting buyers where manufacturing capability, formulations, and differentiated products support the investment case.
European food, beverage, and agriculture merger and acquisition activity reached 418 announced transactions during the first half of 2026, according to MCF Corporate Finance, a 25.1% increase on the corresponding period last year.
Continental Europe accounted for most of the increase, with deal numbers rising from 273 in the first half of 2025 to 364 this year. UK and Ireland activity fell from 61 transactions to 54, although MCF described the mid-market as comparatively resilient while average transaction size declined.
The figures point to a busier market, but one still weighted towards smaller deals rather than a wholesale return of large transactions. Deal count and capital value can move in very different directions, and the increase in activity has come alongside continued selectivity over asset quality and valuation.
Strategic buyers remained the largest group, completing 273 transactions and accounting for 65.3% of activity. Their share nevertheless fell from 78.1% in the previous first half as financial sponsors increased their presence.
Private equity and other financial buyers completed 145 transactions, representing 34.7% of the market. New platform investments rose particularly strongly, from 41 to 95, indicating a greater willingness among sponsors to establish fresh positions rather than limiting activity to additions around existing portfolio companies.
That change has consequences beyond ownership structures because a food acquisition frequently includes processing assets, technical staff, formulations, customer approvals, supplier relationships, and distribution arrangements that would take time to assemble organically.
Food ingredients remained one of the active segments identified by MCF. Buyers have continued to target businesses in natural, functional, and value-added ingredients, particularly where they bring proprietary formulations, processing know-how, or exposure to health, nutrition, protein enrichment, and clean-label demand.
Those characteristics can be more defensible than manufacturing capacity alone. A plant can often be expanded if demand exists, while reproducing a validated formulation portfolio, application expertise, customer relationships, and qualified supply base may take considerably longer.
Recent transactions have reflected that emphasis. Ingredion’s acquisition of Tate & Lyle and Peak Rock Capital’s investment in Dalziel were among the ingredient-sector examples identified in MCF’s review, combining manufacturing capability with established product and customer positions.
Functional nutrition has followed a similar pattern. Protein products, gut-health formats, functional foods, and better-for-you beverages continue to attract strategic interest as larger groups look for categories offering stronger growth than parts of the conventional packaged-food market.
Lactalis’ acquisition of The Protein Works illustrates the industrial dimension. The transaction added an established UK manufacturing and direct-to-consumer platform to Lactalis’ active-nutrition interests rather than requiring the group to build a comparable operation from scratch.
Portfolio reshaping by large food groups is providing supply on the other side of the market. Businesses and brands judged peripheral by one owner can still be attractive to a specialist buyer, particularly where the underlying factory, product category, or customer base remains profitable under a more focused operating model.
The manufacturing outcome of those transactions is not predetermined. Some divested operations receive new investment, while others are integrated into wider production networks through procurement consolidation, product transfers, or site rationalisation. The consequences generally appear after completion rather than in the acquisition announcement itself.
MCF’s valuation data also shows a market where quality differences continue to matter. Transaction multiples increased across a number of segments during the first half while listed-company trading multiples remained comparatively compressed, leaving premium assets able to attract stronger valuations than businesses without a similarly defensible position.
That makes the headline increase in deal numbers a poor proxy for indiscriminate appetite. Buyers may be completing more transactions, but the report continues to distinguish between businesses offering a strategic capability and those relying largely on revenue scale.
Food plants can be particularly difficult assets to assess on turnover alone. Equipment condition, available capacity, utilities, hygiene design, regulatory approvals, customer concentration, automation, maintenance requirements, and the ability to introduce new products all affect what an acquirer actually inherits.
A lower purchase price can quickly lose its appeal if the site requires substantial capital expenditure after completion, while a higher-value business may justify its multiple if the factory, formulations, and customer base create an immediate route into a growing market.
MCF expects activity to remain constructive but disciplined during the second half of 2026, with portfolio simplification, ingredients, and functional nutrition among the areas likely to continue producing transactions.
The 418-deal total therefore records a genuine recovery in volume without showing that valuation discipline has disappeared. More capital is changing hands across European food and drink, but the businesses commanding the strongest interest are still those able to show what the buyer is acquiring beyond another line on a revenue spreadsheet.
