Manufacturing
Turning pressure into opportunities: why this is the moment for consolidation
Belgian manufacturing is under pressure, but within that pressure also lie opportunities. Consolidation is increasing across the sector. Many SME CEOs are asking themselves: How will we grow (and survive) in the future?
Consolidation as a strategy
Consolidation is not just about survival, but also about opportunity. Deal activity may have declined in 2023, but Belgian SMEs remain optimistic: 63% of entrepreneurs see this as a good time to acquire another company, according to Marktlink. PwC's 2024 Belgian M&A survey also confirms this shift, showing that both companies and financial investors are preparing for buy-and-build strategies.
Choosing what you want and what you don't
In the past, manufacturers focused on vertical integration and acquiring suppliers or buyers in the chain. Today the scope is broader. Companies add adjacent capabilities and acquire businesses for their innovation potential, not just for their incremental scale.
Picture it like this: your company is the stable and reliable tanker, but you also want speedboats, agile, innovative and able to enter new territories. The challenge? Finding a balance between protecting your core business and experimenting beyond your core business.
How much time, resources and energy do you spend on new ideas? When and how are they integrated? These are not simple strategic questions.
The balancing-act dilemma: innovation versus identity
While exploring acquisitions:
- Do you replicate core capabilities or expand into new adjacent areas?
- Is there overlap with your existing customers or a risk of too much divergence?
- How do you make sure innovations don't dilute your brand at home?
Ambition is great, but these trade-offs also require clarity!
Why timing matters and what it means for Belgian manufacturers
Despite a small decline in deal volume, valuations in Belgium remain at record levelsespecially for strategic SME targets, according to the M&A Monitor of Vlerick Business School (vlerick.com). That tells us: investors still value resilience, niche leadership and technological and commercial readiness.
A three-step plan for smart consolidation
A practical framework manufacturers can consider:
- Evaluate your core and adjacent opportunities.
Map out which acquisitions strengthen your existing strengths and which open new horizons. - Assess whether your organisation is ready.
Commercial maturity, leadership structure and operational integration capabilities are all crucial before executing a deal. - Balance exploration with protection.
Be willing to invest in new ventures, but only if you have clearly defined which part of your business must remain intact.
- Evaluate your core and adjacent opportunities.
Why companies need an outside-in view
Merluno helps manufacturing companies navigate this complex landscape. We guide you step by step in assessing your market readiness, identifying adjacent capabilities that fit your identity or planning how to integrate new acquisitions without losing sight of your strengths.
Because in difficult times, consolidation can be the smartest move.