Lucy Robson

Welcome to Mergerspresso 2026. Today, we're going to look at how companies are strategically reshaping their businesses. And we're particularly focusing on retail and consumer and energy. So, Chris Taylor is one of our sector leaders on retail and consumer. And Martin Eorsi, who's also with us today, is one of the leaders on energy. Chris, there's been a lot of talk about business refocusing. So, what's happening in retail and consumer?

Chris Taylor

Thanks Lucy. Yeah, that's right. I mean, it's really interesting. We're seeing lots of divestments coming through at the moment as companies look to refocus on their very best assets, raise capital and concentrate on their strongest brands. Lots of examples, Diageo selling off Pampero rum, Reckitt’s doing likewise and selling Essential Home to Advent. And I think this is a trend we're going to see continue.

Lucy Robson 

And Marton, how are you seeing that play through energy?

Marton Eorsi 

We see really similar events with Lucy. So what we're seeing is that energy majors are pivoting back to their coal, oil and gas businesses. Also having spent many years in building renewables, many are now divesting some green assets to refocus on what's currently most profitable.

Lucy Robson

And so I guess as well as honing focus, what about consolidation, for example, how important is scale, Chris?

Chris Taylor

It's a strategic imperative. We're seeing real low confidence in short-term consumer spending, which inevitably is giving rise to a belief that scale is best and therefore R&C companies doubling down on their most profitable operations and aiming to boost efficiencies and bargaining power.

Lucy Robson

I guess scale important in energy as well, Marton.

Marton Eorsi

It's a really similar picture, Lucy, in energy too. The biggest funds and corporates are executing mega deals to secure market leadership. For example, Chevron's acquisition of oil and gas exploration group, Hess, is a clear example about how size now separates market leaders from the rest of the pack.

Lucy Robson

I guess Chris, what's the big commercial driver behind this refocusing?

Chris Taylor

Well, I think there's two in retail and consumer. One is inevitably consumer behaviour, and the other is the continuing unending demands of shareholders. Companies are jettisoning underperforming businesses to ensure that they stay relevant to their consumer, and they can invest in their most popular brands. But at the same time, they can only do that by driving ever increasing levels of profitability. And that's what this pruning and then deal making does for them.

Lucy Robson 

I mean, we're certainly seeing that, I guess, in an energy Marton and from the shareholder pressure side. But what other commercial drivers are you seeing?

Marton Eorsi

What we’re seeing is a refocus in energy policy priorities. So, what we're seeing now that governments are prioritizing security of supply over the size of energy bills and decarbonization. There's also an increased risk appetite amongst investors who are chasing early-stage opportunities, and they are also broadening what counts as infrastructure investment.

Lucy Robson

Well, thank you both. You've kicked us off in great style for 2026. AG's full report on the 2026 M&A Outlook is linked in the comments. Join us again next time on Mergerspresso.