Mergers and Acquisitions Case: Kraft hostile takeover on Cadbury.
After reviewing operations, finance, marketing, supply chain management, this practical example supported my learning within the legal international frame.
Penultimate presentation carried out within a mostly French group, interesting :)
12. Acquisition outcomes " Our integration is progressing extremely well… We moved quickly to name our leadership teams, and I'm pleased that about a third of our top 50 executives are from Cadbury. We've confirmed our synergy targets and the specific initiatives that will drive future margin expansion and accelerate our growth .“* * http://www.ibtimes.com/articles/22743/20100507/kraft-foods-gains-with-cadbury-integration.htm
16. At a glance … Group 2 | Mergers and Acquisitions
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Notes de l'éditeur
Focus on growth to be the leader in snack, confectionery and quick meals industries Achieve sufficient scale to establish cost-efficient infrastructure by expanding its presence in emerging market Optimise sales capabilities by increasing its presence in the instant consumption channels as they continue to gain share versus grocery channels in the US and European Union Increase their margin by reducing costs without impact on the quality of their products and improving the portfolio mix
What are the motivations to acquire cadbury The acquisition of Cadbury will allow Kraft to expand its global presence. Indeed Kraft will be able to be present in South America, Eastern Europe, Russia and China. The group will as well be able to reinforce its position in France and Spain. Kraft and Cadbury Merger Group D (Section N3, IMBA Nov 2009 Intake)
M&A: 51% or 100% Change shareholders pact Tax law Put a deadline to offer and shareholders who have accepted previous offer Real Share Price at purchase time : 13.8 (19.7 BILLION) 14.21 -> 20.3 Billion 10.62 -> 15.1 Bilion
Cash & Stock Agreement http://www.reuters.com/article/idUSTRE60H1N020100120
Challenges obstacles and deal killers Politics Antitrust New Buyers International: M&A usually not easy, here cultultral, tax issues, exchange rate
Acquisition take more time than mergers- longer time than mergers, and different reactions of the bidders who can use some defensive mechanism, lose focus of high management on day to day, hence have to ease it. Possible defence of cadbury Increase expectations Find white knoght Increase dividends to shareholders
Other challenges, as part of cash and part are shares. Currency, shares not static during the whole time, justification of fairness of the acquisitions In M&A we also have to take into price adjustment, in this case as prie offer was below market valuation Kraft had to increase its offer.
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