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Takeover Targets: Consumer Stocks in Play

(Takeover Targets: Consumer Stocks in Play report updated with detail about PepsiCo.)
NEW YORK ( TheStreet) -- Corporate dealmaking is staging a comeback in 2011 after hitting a six-year low in 2009, and a roster of consumer stocks represent potentially lucrative targets.

Rumors of Starbucks (SBUX) looking to acquire Peet's Coffee (PEET) may have been laid to rest -- for now -- but overall M&A activity in the U.S. was up 85.1% year-over-year in the first quarter, indicating future acquisitions across the consumer sector are likely on the horizon. Global M&A was up 28.9% in the first three months of this year.


"Leveraged buyouts likely will remain a persistent theme, as private equity and other buyout firms look to put dry powder to use before capital commitments expire," noted Morningstar analyst R. J. Hottovy earlier this year. "We also expect acquisitions to have a global feel in 2011, as domestic firms look to both established and emerging markets for takeover candidates to enhance anemic domestic returns during the last few years."

In March General Mills (GIS) acquired a 51.5% stake in French yogurt maker Yoplait in a deal valued at $1.1 billion. HJ Heinz (HNZ) also looked overseas for growth, announcing it acquired 80% of Brazil's Coniexpress S.A. Industrias Alimenticias, maker of the Quero brand of ketchup and condiments.


Other firms looked to growing niche markets for expansion. Anheuser-Busch InBev (BUD) said last week it would pay a combined $38.8 million to acquire Chicago-based craft brewer Goose Island Beer; and Coca-Cola (KO) exercised its right to acquire the remaining portion of organic bottled tea maker Honest Tea for an undisclosed amount.

"With further stabilization in the credit markets, we also expect a handful of blockbuster strategic acquisitions this year, many of which could change the landscape of their respective industries," Hottovy added.

Here then is a roundup of potential M&A targets in the consumer sector. Read on to see who the prime targets are likely to be ....

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