On sluggish market demand, the retail chains across the world are packed up and available to be sold, in a time when cash has become a scarce commodity. Under these circumstances, isn’t this the best time for investment funds and strategic investors to go back on a shopping spree?

Mergers and acquisitions in crisis

Specialists polled by Wall-Street say they expect a major turnaround of M&A sector in retail, both in the midst of recessionary times and at the end of the downturn, when strategic and financial investors would think distressed-asset problem is solved.

“It is possible to see even more appealing offers in crisis. Because as we all know, good deals are made in crisis. Therefore, prices can become favorable to buyers, and offers will be more interesting accordingly”, Andi Dumitrescu, managing director at GfK Romania.

As he noted, the local retail industry is in full process of maturing, and a round of M&A deals would speed up the process. “In 2004-2006 there was a high M&A activity (by the entry of Carrefour, Julius Meinl, Edeka or Delhaize). Even if not at the same alert pace, this M&A process is likely to be continued, given the maturity of the market”, GfK’s representative said.

But as any acquisition process calls for long negotiation (sometimes more than a year), Dumitrescu forecasts major deals in food retail industry by as soon as year-end.

“The preferred acquisition route will go to local retailers”, said Flavian Pandele (photo), managing director of integrated advisor for retail, IMS Retail Bucharest. Furthermore, as Pandele continued, retailers will extend their own chains, on falling land prices.

High interest, limited offer

Although there are both interest and demand, the existent offer is not much diversified, said Guy Verduystert the former financial advisory director of Deloitte and current princip