After years of cost-cutting and sitting on the sidelines when it comes to mergers and acquisitions, leading companies in all industries are finally ready to start putting some of that cash to work.

In the consumer goods space, Morningstar has identified a trio of companies that appear poised to make some noise on the M&A front:


The world's largest food company is looking to expand its empire to the so-called health and wellness category in response to consumer demand for healthier and more sustainable food and beverages and, according to Morningstar's Philip Gorham, NESR figures to be front and center of some the tuck-in acquisitions of smaller players in this niche market.

"With around $14 billion in cash still remaining from the sales of Alconto Novartis, and a point to prove that the firm is a serious player in nutritional categories, Nestle is a likely acquirer," Gorham wrote in a research note.

Coca Cola

The soft drink giant might have its sights set on Monster Energy, a brand that Gorham said has managed to "hold its own in an industry dominated by behemoths Coke and Pepsi."

"Having largely completed its distribution rollout in the U.S., international opportunities remain and we think any takeout would occur at a substantial premium to the current market value," he wrote. "KO is the obvious suitor because Monster is already distributed on its platform."

Turns out younger beer drinkers are more discerning than their elders and that's causing all the big beer makers to refine their product portfolio internally or pony up to acquire premium brands to lock down the "tastes great" crowd.

Gorham said SABMiller could be eyeing Boston Beers, the owner of Sam Adams, the most popular brand in the better beer category.

"Millennials are switching from mass-produced beers to higher quality crafts and imports and we do not think the big players can ignore the trend for much longer," he wrote.

"While any of the industry leaders could swallow Boston Beer, we think [SAB] is the most likely acquirer because of its healthy balance sheet."


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