Mergers And Acquisitions Essay Example | Topics and Well Written Essays - 2500 words

Mergers And Acquisitions - Essay ExampleThe companies are lancinate to reach out to a global customer base in a bid to reply to the increased pressures of achieving scale (Finkelstein, 1999, pp.1). This is in addition one of the motives in the case of Kraft and Cadbury deal as it result open new markets for the gild. A thorough analysis of this deal covering aspects like long bourn strategies, regulatory implications, financing, defence mechanisms etc has been presented in the paper. Strategy of Kraft Inc Recently there has been a spate of nuclear fusion and science activities across the globe with the bidder taking advantage of the low target valuation. Besides the low valuations the former(a) incentives in a merger and acquisition deal are tapping developing markets, acquiring access to the customer base of the target company, capitalising on the good-will of the target, generating business synergies etc. The global fruit strategy of Kraft Foods is also based on the afore mentioned objectives. By way of this strategy the company is anticipating an organic ontogeny in its tax base by 5% or higher accompanied by a growth of 9% to 11% in the earnings per share (EPS) placing it in a good stead in the worldwide nutriment industry. Irene Rosenfeld, Kraft Foods Chairman & CEO, takes pride in the market positioning of the company which has at present entrenched itself as global snacks powerhouse based on its unparalleled portfolio of leading local and regional brands. By virtue of this unique compounding and its significant market presence in the emerging markets the company is expected to register a consistent growth. The global growth strategy has enabled Kraft to lay the hind end for strong growth. The company aims at taking its performance to a higher level by supplement on its scale and investing strategically in sales, marketing, innovation and create a high-class cost-structure. The acquisition of Cadbury has made Kraft Food an undisputed leade r in Snacks, a high-margin and high growth menage which comprises more than fifty percent of the total revenue of the company. The Snacks portfolio of the company is complemented by iconic local and regional brands in grocery, cheese, beverage etc. A majority of these iconic heritage brands are placed in top positions and is the favourite of the consumers who tend to be extremely loyal towards these brands. They generate high margins and have deep cash flows. The popular heritage brands offer Kraft Inc the unique opportunity of investing profits from its unchangeable cash rich businesses to fast growing and high margin yielding developing markets. Kraft and Cadbury combination offers the scale required to grow distribution and sales in existing and new markets. The company anticipates revenue synergies and cost synergies to the tune of $1 billion and $750 million by 2013. Based on its anticipated growth in EPS and organic revenue Kraft Inc aims at becoming a top-rung performer in the food industry (Kraft Foods Inc.-a, 2010). Regulatory implications The takeover of Cadbury by Kraft has been spoiled by the controversy surrounding the blockage of Somerdale factory thereby creating sentiments of mistrust in the manner the Kraft is held. Now the company faces a blotto challenge in restoring its image in UK. The evidences gathered from