As Performance and Growth Avenues Lag, Companies Pursue M&A

Why It Matters

Programmatic M&A gives packaging companies a viable route to offset weak organic growth and boost shareholder value while reshaping industry concentration toward sustainable, high‑margin segments.

Key Takeaways

• Programmatic M&A focuses on many small‑to‑medium deals
• Top performers earned ~12% returns using programmatic deals
• 94% plan more sub‑$1B acquisitions, even at premium
• Sustainability, healthcare, food service are most attractive segments
• Deal sizes grew, but volume moderated since 2023

Pulse Analysis

The packaging sector’s post‑pandemic slowdown has forced leaders to look beyond traditional organic expansion. While megadeals like Smurfit Kappa‑WestRock grabbed headlines, the underlying strategic shift is toward programmatic M&A—an approach that stitches together a series of targeted, modest‑sized acquisitions. This model reduces integration risk, allows firms to fine‑tune portfolio composition, and aligns capital deployment with specific market opportunities such as sustainability‑focused packaging or specialty healthcare containers.

McKinsey’s analysis shows that companies that embraced programmatic tactics outperformed peers, delivering roughly 12 % median total shareholder returns and allocating two‑thirds of their deals to this disciplined pipeline. Executives cite consolidation and scale as primary motives, but the data also reveal a clear appetite for sectors poised for growth—namely eco‑friendly solutions, medical packaging, and food‑service applications. By concentrating on a handful of core product lines and employing roll‑up strategies, firms can achieve economies of scope while preserving agility in a volatile economic environment.

Looking ahead, the appetite for sub‑$1 billion transactions remains robust, with 94 % of surveyed leaders willing to pay a premium for the right assets. This willingness signals confidence that smaller, strategic deals can generate outsized returns, especially when financed with equity rather than debt. As the broader economy cycles, packaging M&A activity is likely to mirror macro trends, expanding during recoveries and contracting in downturns, but the programmatic playbook positions companies to capitalize on both short‑term opportunities and long‑term structural shifts.