Sharpening portfolios for scale and focus
Consumer and retail companies are sharpening their portfolios through a two-pronged approach, exiting brands and businesses that lack scale or no longer fit core strategic priorities, while doubling down on strong brands and platforms where they see clear competitive advantage. CEOs are prioritising global brands and scalable platforms that can operate efficiently across markets, reinforcing a shift towards leaner operating models. Pockets of distress, particularly in the UK, are creating additional deal flow. As a result, corporate spin-offs and divestitures are likely to accelerate in 2026, with a mix of private equity and strategic buyers stepping in.
Unilever’s spin-off of its Ice Cream division and targeted disposals, particularly of local food brands in Europe, including The Vegetarian Butcher and healthy snacking brand Graze, illustrate the mix of bold and incremental steps shaping this reset. Procter & Gamble, Reckitt, Coty, and others are taking similar actions, divesting smaller local brands, niche or entire categories and legacy formats that no longer fit their strategic priorities.
While many of these divestitures are smaller and less headline-grabbing than megadeals, they are collectively meaningful. By steadily pruning lower return or non-core assets, companies are improving capital discipline, simplifying operations and positioning themselves for higher-growth, higher-margin opportunities. Portfolio simplification is likely to remain a central strategic theme well into 2026 and beyond.
Private equity targets consumer brands through take-privates
Private equity executed several notable take-private transactions in 2025. Deals included DBay Advisors’ acquisition of consumer health company Alliance Pharma, Sycamore Partners’ take-private of US pharmacy and retail group Walgreens Boots Alliance, MCR Hotels’ agreement to acquire global hospitality and private members club operator Soho House & Co, 3G’s acquisition of the global footwear brand Skechers, and an investor group led by TriArtisan Capital Advisors announcing a take-private of US family-dining restaurant group Denny’s.
These deals reflect ample private equity dry powder, lower financing costs and renewed interest in undervalued consumer companies with strong brands. In 2026, we expect continued activity as buyers target public consumer businesses under pressure from changing consumer habits and structural retail disruption.
A renewed push for consolidation in core markets
Companies across consumer markets accelerated scale-driven M&A in 2025 to improve resilience and unlock efficiencies amid ongoing cost pressures and increasingly value-conscious consumers. We expect this theme to continue in 2026 as companies seek competitive advantage and operating leverage in demand-sensitive categories.
Consolidation is occurring in sectors such as grocery, beauty and personal care, pet and vet services, and transport and logistics—where fragmentation and rising operating costs strengthen the case for scale. Mars’ acquisition of Kellanova, for example, completed in December 2025, broadens its brand portfolio and extends its reach across global markets.
The proposed Union Pacific–Norfolk Southern rail merger, one of the largest deals of 2025, illustrates the transformative potential of consolidation, with implications for consumer goods distribution, retail replenishment, e-commerce fulfilment, and supply-chain reliability. Supply chain resilience remains a priority across consumer companies, partly accelerated by tariffs but also the overall more volatile environment.
Capability-led acquisitions blur sector boundaries
Capability-driven M&A is expected to increase as retailers, platforms, and brand owners strengthen their technology, logistics, and data foundations. AI-enabled customer engagement, rising fulfilment expectations, and the economics of e-commerce are prompting companies to acquire rather than build these capabilities, especially where speed to market matters.
Industry convergence is accelerating as companies expand into adjacent areas such as logistics, healthcare, media, and electronics to broaden operational and commercial capabilities. These moves are improving fulfilment reliability, deepening customer insight, and enabling more efficient digital commerce.
Recent examples include JD.com’s acquisition of Ceconomy, giving the Chinese e-commerce platform a foothold in European consumer electronics retail, IKEA’s acquisition of AI-powered logistics software company Locus, and UPS’s acquisition of Andlauer to grow its healthcare logistics and cold-chain capabilities. In the home improvement space, Home Depot’s acquisition of specialty building products distributor GMS and the acquisition of Foundation Building Materials by Lowe’s reflect a common strategic push to deepen exposure to the professional contractor segment. Together, these transactions highlight how companies are expected to use M&A in 2026 to secure critical capabilities and customer access that support long-term growth and resilience.
Founders reclaim control of their brands
A notable trend in 2025 has been the rise in “founder buybacks” across the consumer sector, as entrepreneurs reacquire brands they previously sold to corporates or financial sponsors. Examples include Huda Kattan regaining full ownership of Huda Beauty, Adam Miller buying back Revel Bikes, Stella McCartney purchasing back LVMH’s minority stake in her fashion house, and the reacquisition of Australian beauty retailer RY by its founders.
We expect more deals of this nature in 2026 as corporates and sponsors continue optimising portfolios rather than nurturing mid-tier growth plays. Founder-buyback deals offer a strategic reset, one that aligns closely with customer preferences, as consumers increasingly value authenticity and the original brand ethos that founders are uniquely positioned to champion.
