Brazilian beer merger negotiations

Résumé du document

International firms are more and more dealing with an International orientation by developing the business in new emerging markets and consolidating the loyal ones. In order to be effective, they have to control many elements in the same time: accountancy, human resources or sales department are really important in each company's organization. In order to develop their activities, firms have different choices: they can expand activities around the world by different ways such as opening new subsidiaries in new countries, or send local agents which are going to develop the market alone.

What we are going to see in our case is merger and acquisition of firm or how two companies can combine their forces in order to be able to penetrate new markets and get new customers. In some case it represents many opportunities for the firm which is acquired: a way to restart its business, get fresh cash and the knowledge of another company. The main difficulty it represents is how it is possible to create synergy between people from different horizon. We will see the limit of this system and the problem which could be created too.

Extraits

[...] What we are going to see in our case is merger and acquisition of firm or how two companies can combine their forces in order to be able to penetrate new markets and get new customers. In some case it represents many opportunities for the firm which is acquired: a way to restart its business, get fresh cash and the knowledge of another company. The main difficulty it represents is how it is possible to create synergy between people from different horizon. We will see the limit of this system and the problem which could be created too. This final assignment is going to be developed around notion of merger and acquisition. [...]

[...] At first we are going to define clearly what it is. How firms are expanding themselves with different strategies all around the world and articulate their strategies depending on the firms they are acquiring or merging. We would consider the case of “Brazilian Beer” where we will see how two giants of the beer market in Brazil tried in May 1999 to merge: and “Antarctica”. We will see how this operation worked, the teaching and the different conclusion we can get from this case. [...]

[...] Is it in order to boost activities? Then I would of course keep in mind the size of the firm because we are not going to proceed the same way with a small firm than with a big one. The second step as we have seen before is maybe one of the most difficult ones which concern the evaluation of the company's value trough the method which is the most appropriate one (price earnings ratio, price to book ratio or price to sales ratio for big firms for example). [...]

[...] Normally two important firms which are on the same market and which are competitors have to become the leader without problems: they have many strengths on their disposal: wealthy financial situation, production capacity, research and development department for example. But the fact is that theory is often easier than realty. From my point of view the major problem is the human aspect that contrary to figures, you can't plan at all. You have to manage people which were competitors since many years and now you have to make them work together: that is clearly complicated to change mentality. [...]

[...] For our Antarctica and Brahma case this is the organization I would put in place in order to make this merger and acquisition a success: structure and organization. I am a person who is really organized and who is able to take with hindsight. I would proceed as I have done in this case: an analysis of each firm and of the market where there are present, the repartition of the market shares, and position of each firm on this same market. [...]