Unlocking value and accelerated M&A deal flow in a global post mega-merger and acquisition era
The packaging industry experienced a series of especially large mergers and acquisitions, peaking in 2022, and, while dealmaking has slowed in the few years since these mega mergers and acquisitions peaked, several factors may point to an upcoming increase in m&a transactions.
The packaging sector has entered a prolonged downturn, driven by weak consumer spending and broad-based destocking. Sales volumes and operating rates have dropped sharply in the past few year. A slow and uneven recovery is expected through 2026.
Valuations Under Pressure
Growing market uncertainties have pushed public companies to seek growth and drive shareholder value through M&A deals. These uncertainties come in many forms. Inflation and cost sensitivity emphasize the importance of the efficiency gains and synergy created through consolidation. Volume declines in 2025 extended earlier demand softness and mean that companies are facing muted organic growth. High interest rates have raised buyout costs and constrained private equity returns. This has depressed valuations and might create entry points for acquirers. Supply chain disruptions and geopolitical volatility are driving companies to look for new ways to mitigate risk. The resulting lower valuations could lead to a new wave of m&a transactions in the industry.
Balance Sheet Pressure, Regulatory Environment Could Drive M&A Strategy
Mergers and acquisitions driven by balance sheet pressure can create value for sellers and acquirers. For sellers, acquirers can absorb volume and quickly unlock synergies. Carve-outs and divestitures of non-core assets can stabilize liquidity. Public company to private company or sponsor-led resets can give businesses room for restructuring. Acquirers can find attractive entry points and a value creation thesis built on operational discipline, optimizing footprints and repairing balance sheets for durable value.
Packaging regulations in Europe are leading to increased complexity for manufacturers. These pressures tend to favor scale which could accelerate consolidation through m&a deals. Some European market players are increasing viewing North America as a comparatively lower-cost environment which could lead to more cross-border dealmaking. In the U.S., regulatory fragmentation is increasing the value of scale and geographic flexibility which can come through mergers and acquisitions.
What’s Next for Value Creation
Rabobank’s report describes a trend of returning to fundamentals through merger and acquisition activity as a way forward for value creation in the packaging industry. This focus on core assets and fundamentals of a company’s business model mirrors wider trends in food and beverage. As some companies undertake restructuring and look to divest non-core assets, this can create opportunities for others to acquire those assets.
In this environment of consolidation, small- and medium-sized players will need to adjust their business models to find competitive advantages to leverage in an industry that will likely see more consolidation through mergers and acquisitions.
Rabobank’s report details examples of strategies those players may take to protect market share in a competitive environment.
Report Authors
Xinnan Li
Senior Analyst, Packaging & Logistics
Natasha Valeeva
Senior Analyst, FA Packaging & Logistics
Jim Owen
Senior Packaging & Logistics Analyst
Disclaimer
This publication is issued by Coöperatieve Rabobank U.A., registered in Amsterdam, The Netherlands, and/or any one or more of its affiliates and related bodies corporate (jointly and individually: “Rabobank”) Coöperatieve Rabobank U.A. is authorised and regulated by De Netherlansche Bank and the Netherlands Authority for the Financial Markets. Rabobank London Branch is authorised by the Prudenital Regulations Authority (“PRA”) and subject to regulation by the Financial Conduct Authority and limited regulation by the PRA. Details about the extent of our regulation by the PRA are available from us on request. Registered in England and Wales No. BR002630. An overview of all locations from where Rabobank issues research publications and the (other) relevant local regulators can be found here: RaboResearch locations – Rabobank
The information and opinions contained in this document are indicative and for discussion purposes only and is not, and should not be construed as, an offer, invitation or recommendation. This document shall not form the basis of, or cannot be relied upon in connection with, any contract or commitment by Rabobank to enter into any agreement or transaction. The contents of this publication are general in nature and do not take into account your personal objectives, financial situation or needs. The information in this document is not intended, and should not be understood, as an advice, (including, without limitation, an advice within the meaning of article 1:1 and article 4:23 of the Dutch Financial Supervision Act). You should consider the appropriateness of the information and statements having regard to your specific circumstances and obtain financial, legal and/or tax advice as appropriate. This document is based on public information. The information and opinions contained in this document have been compiled or arrived at from sources believed to be reliable, but no representation or warranty, express or implied, is made as to their accuracy, completeness or correctness.
The information and statements herein are made in good faith and are only valid as at the date of publication of this document or marketing communication. Any opinions, forecasts or estimates herein constitute a judgement of Rabobank as at the date of this document, and there can be no assurance that future results or events will be consistent with any such opinions, forecasts or estimates. All opinions expressed in this document are subject to change without notice. To the extent permitted by law Rabobank does not accept any liability whatsoever for any loss or damage howsoever arising from any use of this document or its contents or otherwise arising in connection therewith.
This document may not be reproduced, distributed or published in whole or in part, for any purpose, except with the prior written consent of Rabobank. The distribution of this document may be restricted by law in certain jurisdictions and recipients of this document should inform themselves about, and observe any such restrictions.
A summary of methodologies used by Rabobank can be found on our website.
Coöperatieve Rabobank U.A., Croeselaan 18, 3521 Utrecht, The Netherlands. All Rights Reserved.