The circular economy is seeing a surge in mergers and acquisitions

Mergers and acquisitions in the circular economy are gaining traction. Since 2021, the number of transactions worldwide has been on the rise. This article explores 15 such deals, highlighted in the graphic below, with an in-depth analysis of acquisition types, sector priorities, scaling approaches, and emerging trends.

The total value of these transactions remains uncertain, as financial details for more than half were not disclosed. However, publicly available data from six deals amounts to $17.6 billion (see Table 1). The largest was a consortium led by Permira and Blackstone, which acquired Adevinta, a major online classifieds platform, for approximately $13 billion. Other notable transactions exceeding $1 billion include Etsy’s purchase of Depop, Naver’s acquisition of Poshmark, and CarGroup’s acquisition of Trader Interactive. Given the size of the acquiring and target companies, it is reasonable to estimate that the undisclosed deals contribute several billion dollars more, bringing the likely total for these 15 deals to over $20 billion.

Types of Acquisitions

A clear trend in these deals is their alignment with the three main M&A strategies—vertical integration, horizontal integration, and diversification.

Vertical integration involves acquiring companies across different stages of the supply chain, enhancing control from production to distribution.

Horizontal integration occurs when companies merge with or acquire direct competitors, allowing them to expand market reach, gain economies of scale, and reinforce their competitive standing.

Diversification refers to acquisitions in different industries or product categories, enabling companies to explore new revenue streams while reducing risk exposure.

Among the 15 transactions analyzed, horizontal integration emerged as the dominant strategy, accounting for nine deals.

Expanding Reverse Logistics Capabilities

The rising volume of product returns, which exceeded $890 billion in the U.S. alone, has fueled demand for enhanced efficiency, sustainability, and customer experience in returns management. Leading logistics companies are addressing this challenge by strengthening their reverse logistics capabilities.

One notable example is DHL Supply Chain’s acquisition of Inmar Supply Chain Solutions, announced on January 9, 2025. This deal positions DHL as the largest reverse logistics provider in North America, integrating 14 return centers and 800 associates into its operations, bringing its North American presence to over 520 warehouses and 52,000 employees.

Similarly, UPS acquired Happy Returns from PayPal on October 25, 2023, enhancing its reverse logistics capabilities. Happy Returns specializes in a seamless, no-box, no-label return process, which has been integrated into UPS’s vast network, expanding return options to more than 12,000 U.S. locations.

These acquisitions highlight a broader trend of logistics firms investing in specialized e-commerce return solutions, incorporating advanced software and analytics to streamline operations, improve cost efficiency, and reduce environmental waste.

Strengthening Technological Capabilities

Several acquisitions reflect the need for businesses to stay ahead in an era of rapid technological advancement.

Accenture’s acquisition of OnProcess Technology (January 2024) enhanced its automation, artificial intelligence, and data analytics expertise. OnProcess had already scaled to handle 20 million service orders and return transactions annually across 110+ countries, aligning with Accenture’s push for digital transformation and sustainable supply chain solutions.

Jabil Inc.’s acquisition of Retronix (March 2023) added specialized refurbishment technologies for integrated circuits (ICs) and printed circuit boards (PCBs), reducing electronic waste and extending component life cycles. Retronix’s innovations, such as laser reballing, support Jabil’s circular economy initiatives by preserving component integrity and minimizing obsolescence risks.

These acquisitions illustrate how companies are leveraging M&A to integrate cutting-edge technology, optimize supply chains, and support sustainability initiatives.

Scaling Through Circular Platforms

Two-thirds of the transactions analyzed involve circular platforms, leveraging network effects to scale in the circular economy.

One of the most dynamic areas has been the consolidation of apparel resale marketplaces. The recommerce market for apparel is projected to reach $350 billion globally by 2028, growing three times faster than the overall fashion industry. This growth has driven a wave of acquisitions, including:

Trove’s acquisition of Recurate

Vinted’s purchase of Trendsales

Naver’s acquisition of Poshmark

GOAT’s acquisition of Grailed

Vestiaire Collective’s takeover of Tradesy

Etsy’s purchase of Depop

These transactions demonstrate a strategic effort to consolidate the apparel resale industry and scale recommerce platforms, reinforcing the role of digital marketplaces in reshaping consumption patterns.

In the online classifieds sector, CarGroup’s acquisition of Trader Interactive stands out. CarGroup, an Australian online auto classifieds company, first acquired a 49% stake in Trader Interactive in 2021 before purchasing the remaining shares the following year in a deal valuing Trader Interactive at $1.9 billion. This acquisition significantly expanded CarGroup’s U.S. market presence and strengthened its position in global vehicle resale markets.

Private Equity’s Growing Interest in Circular Economy Businesses

Private equity firms are increasingly investing in circular economy companies, recognizing their long-term value and alignment with sustainability trends.

Permira and Blackstone’s consortium acquisition of Adevinta (a leading online classifieds platform) for $13 billion underscores private equity's interest in digital resale ecosystems.

Nordic Capital’s acquisition of Foxway, a European circular IT services provider, highlights investor focus on increasing circularity in tech hardware and sustainable IT solutions.

These investments indicate a growing belief that circular economy models can deliver strong financial returns while addressing sustainability concerns.

Challenges in Circular M&A: Acquisition and Retreat

Not all acquisitions result in long-term success. ThredUp’s acquisition and later divestment of Remix Global exemplifies the challenges in expanding circular businesses internationally.

ThredUp acquired Remix Global, a European fashion resale company, in July 2021 for $28.5 million as part of its European growth strategy. However, by December 2024, facing financial difficulties and a declining market capitalization, ThredUp decided to divest Remix for $65.3 million. While this represented a financial gain, the move also signaled a strategic retreat from its European ambitions, highlighting the complexities of scaling in the circular economy.

Conclusion

These M&A activities demonstrate how companies are increasingly integrating circular economy principles into their business models. From scaling digital resale platforms to expanding reverse logistics and integrating advanced technologies, businesses are using acquisitions to enhance their sustainability strategies while capturing new market opportunities.

Looking ahead, reverse logistics, circular eCommerce, and circular tech innovations will likely continue to be key areas for M&A in 2025. Logistics firms are enhancing their service offerings to meet growing e-commerce demands, while technology-driven circular business models are reshaping consumption patterns. As companies seek to balance sustainability with profitability, the circular economy is becoming a major driver of competitive advantage and long-term value creation.