市場學(xué)Essay舉例：Analysis of Kraft's Takeover of Cadbury
本文是市場學(xué)專業(yè)的留學(xué)生Essay范例，題目是“Analysis of Kraft's Takeover of Cadbury（卡夫收購吉百利的分析）”，吉百利的歷史可以追溯到近兩個世紀(jì)前，當(dāng)時由約翰?吉百利(John Cadbury)創(chuàng)立，他在英國伯明翰銷售可可豆和茶葉。后來，他在與印度史威士合并后，將公司名稱改為吉百利史威士(Chinn Schweppes, 1998年)，開始了一系列飲料的擴(kuò)張。成功的產(chǎn)品開發(fā)和發(fā)布使吉百利擁有了廣泛的糖果產(chǎn)品線，包括可可精華、復(fù)活節(jié)彩蛋、牛奶巧克力、吉百利手指、牛奶、伯恩維爾巧克力、牛奶托盤、奶油彩蛋、Crunchie、Picnic、Curly windy、Wispa boost、Twirl和Time Out(吉百利2010年)。
Overview Of Both Companies兩家公司概況
Cadbury’s origins date back to almost two centuries when it was founded by John Cadbury who started the business by selling cocoa and tea in Birmingham, UK. Later he expanded by starting a line of beverages after a merger with Indian Schweppes changing the company name to Cadbury Schweppes (Chinn 1998). Successful product developments and launches have enabled Cadbury to boast of an extensive confectionary line consisting of Cocoa Essence, Easter Eggs,Milk Chocolate, Cadbury Fingers, Dairy Milk, BournevilleChocolate, Milk Tray, Flake Creme Egg, Crunchie, Picnic, Curly windy, Wispa boost, Twirl and Time Out (Cadbury 2010).
Kraft, on the other hand, is a US company about a century old, which started off as a door to door cheese business but expanded into other confectionary items through many takeovers previously such as Ritz Crackers, Nabisco (Oreos) and Phenix Cheese Corporation (Philadelphia Cheese) to achieve success (Smith 2009). It is second in terms of sales and popularity in the confectionary industry with annual revenues of $42 billion, operating in more than 150 countries (Kraft 2008).
The Idea Of A Takeover收購的想法
Due to recessionary times following fall in sales, many companies in the confectionary industry recognized the potential of merging with their competitors to become competitive and enjoy economies of scale (Mauboussin, 2010). Cadbury had continued to be a strong performer in the confectionary industry and shown steady performance and growth in light of the turbulent economic times. Much of Cadbury’s growth was due to its presence in emerging global markets. Kraft was attracted to Cadbury due its strong performance during the economic crisis. This led to Kraft’s proposal to Cadbury of a takeover.
由于銷量下降后的經(jīng)濟(jì)衰退，糖果行業(yè)的許多公司認(rèn)識到與競爭對手合并的潛力，以變得有競爭力，并享受規(guī)模經(jīng)濟(jì)(Mauboussin, 2010)。吉百利在糖果行業(yè)一直表現(xiàn)強(qiáng)勁，并在經(jīng)濟(jì)動蕩時期顯示出穩(wěn)定的業(yè)績和增長。吉百利的增長很大程度上歸功于其在新興全球市場的存在。吉百利在經(jīng)濟(jì)危機(jī)期間的強(qiáng)勁表現(xiàn)吸引了卡夫。這導(dǎo)致卡夫向吉百利提出收購要約。
The initial offering of $16.3 billion or 740pence per share by Kraft to Cadbury was outright rejected as derisory and an attempt by Kraft to take over Cadbury for cheap. Cadbury has had strong brands whose icons are etched in the minds all over the world, an impressive category line and extensive worldwide consumer base. Successful financial overview and steady business model reinforced Cadbury’s belief that it should be an independent company. Kraft’s bid did not come remotely close to reflecting the company’s true worth.
Kraft proposed another bid shortly: This comprised of an offer of ￡10.1 billion ($17 billion, same terms as the first bid in September-300 pence in cash and 0.2589 Kraft shares per Cadbury shares. The closing price of 9th November reflected the bid valuation of Cadbury at 710 pence which was lower than the share price of 761p on that day.
Kraft’s share price: $26.53; Exchange rate (as agreed): $1.66 / GBP. Ratio: 0.2589 Kraft shares per every Cadbury share (26.53/1.66 * 0.2589 = ￡ 4.133 + 4.13 = ￡ 7.13).This was less than the price of Cadbury on that day and even the initial level of ￡ 7.45.
Cadbury rejected the offer on the basis of undervalued Cadbury which was now of a lesser value. It was in fact even lower than the current Cadbury share price.
The Cadbury chairman said:“Under your proposal, Cadbury would be absorbed into Kraft’s low growth, conglomerate business model, an unappealing prospect which contrasts sharply with our strategy to be a pure play confectionery company.”
The hype created by rumors of takeover figures led to exciting speculations .Media reported Ferrero to be considering a rival bid. Hershey’s confirmed its own interest for same purpose. There were not only speculations of a joint bid but also of Kohlberg Kravis Roberts & Co. joining the bidding race. All this favored Cadbury whose share price witnessed new highs. Hershey’s and Ferrero would struggle to bid alone and only their combined offer could beat Kraft’s offer.
有關(guān)收購數(shù)字的謠言引起的炒作引發(fā)了令人興奮的猜測。媒體報道稱費列羅正在考慮另一個出價。為了同樣的目的，好時也證實了自己的利益。不僅有聯(lián)合投標(biāo)的猜測，而且還有kkr公司參與投標(biāo)的猜測。這一切都有利于吉百利，其股價創(chuàng)下新高。好時和費列羅單獨出價將會很困難，只有合并后的出價才能超過卡夫的出價。
On January 18, Kraft finally managed to take over one of the world’s second largest confectionery manufacturer in a hostile bid of an enormous 11.5billion (US$19.5billion). This deal will be remembered in history as one of the largest transnational deals, especially in the aftermath of credit crunch. After four months of continuous resistance, Cadbury shareholders agreed to Kraft’s offering of $19.5 billion, (840 pence per share). This was agreed upon with the spirit of creating the world’s largest confectioner. This consisted of 500 pence in cash per share and the remaining amount paid to Cadbury shareholder in the form of Kraft shares. The shareholders had the power to decide the mix of amount they wanted in cash and shares. According to estimations, the finals offer presented a multiple of 13 times Cadbury’s earnings in 2009 (after interest, taxes and debt were paid).
The high bid price overruled the threat of Hershey’s or Unilever offering a price for the same strategy, that is take over. The only rival left was Nestle which too was reduced significantly when Cadbury’s Director signed the agreement that if Cadbury were to change its mind about the takeover, it would pay a handsome penalty for it, hence such a situation arising became highly unlikely. The Kraft management, led by Irene Rosenfeld also assured that Kraft had a great respect for Cadbury’s brands, employees and reputable history and therefore the employees of Cadbury would do well in the new environment. Also, she verbally assured that under the new agreement the previous contractual rights of the employees would remain the same as before.
Market Structure Of The Two Companies兩公司的市場結(jié)構(gòu)
Cadbury and Kraft are both multinational operations with activities in both developed and developing countries. Cadbury is however the market leader in UK and Ireland’s confectionary where consumers have a liking for British chocolate containing vegetable oil having a richer taste in milk and also sweeter as opposed to continental chocolate having cocoa fat content; hence Kraft has a low share in such markets.
吉百利和卡夫都是跨國公司，在發(fā)達(dá)國家和發(fā)展中國家都有業(yè)務(wù)。然而，吉百利是英國和愛爾蘭糖果市場的領(lǐng)導(dǎo)者，這些國家的消費者喜歡含有植物油的英國巧克力，它的牛奶味道更濃，也更甜，而不是含有可可脂的歐洲大陸巧克力;因此卡夫在這些市場的份額很低。
Also, Cadbury’s strong standing in the Indian (Schweppes) and North American Markets was cleverly identified by Kraft who wanted to tap it and exploit under its own name now to add to its success story.
Advantages Of The Takeover For Kraft.
It was the biggest cross-border acquisition this year. Such a deal clearly pushed Kraft as number 1 dealer in confectionary. A merger allowed Kraft to gain a footing in the fast growing chewing gum category.
Kraft management believes that the combination of the two companies is both a strategic as well as complimentary fit, boasting a portfolio of over 40 confectionary brands each having the ability to yield annual sales of over $100 million.
A combination of Kraft products like Toblerone, Oreos and Ritz crackers with Trident gum and Dairy Milk chocolates from Cadbury would result in $625 million annual pretax cost savings on annual company costs of research and development, advertising, branding and procurement. There would also be a significant level of revenue synergy ($50 billion annually) that would subsequently result in higher earnings per share. After the takeover, Kraft would have a greater ability to compete with the giant Nestle on confectionary grounds by increasing its market share in Britain and enjoying the benefits of Cadbury’s strong geographical networking in Asia.
Kraft’s growth prospects would brighten through access to new brands particularly in the confectionary department along with new distribution channels for the existing products which are outside US. These constitute about one third of the market in developing countries such as Africa, China and India.
Advantages Of The Takeover For Cadbury收購吉百利的好處
Cadbury would profit from Kraft’s extensive distribution network around the globe. Cadbury had been vulnerable to a takeover ever since it demerged its US soft drinks business. This high takeover bid was an attractive opportunity to do away with such a fear. A combined Kraft and Cadbury would significantly expand the global reach of both businesses and create synergies worth in the region of $625m. Since a stand-alone Cadbury “had limited opportunities for value creation,” agreement to the contract for takeover seemed like a wise decision.
吉百利將從卡夫在全球的廣泛分銷網(wǎng)絡(luò)中獲利。自從吉百利將其美國軟飲料業(yè)務(wù)分拆以來，該公司一直容易受到收購。如此高的收購出價是消除這種恐懼的一個有吸引力的機(jī)會。卡夫和吉百利合并后，將顯著擴(kuò)大兩家公司的全球影響力，并在該地區(qū)創(chuàng)造價值6.25億美元的協(xié)同效應(yīng)。由于獨立的吉百利“創(chuàng)造價值的機(jī)會有限”，接受收購合同似乎是一個明智的決定。
Disadvantages Of The Takeover
Along with the obvious benefits come the many challenges and ethical issues. These are primarily high debt issues and employee layoffs. The high debt position of Kraft has further worsened with the takeover as funds were borrowed to pay the Cadbury shareholders a higher yield. Kraft also sold off its frozen Pizza line in order to make the takeover happen.
The unions are worried that the jobs of hundreds would be at stake (estimated 9000plus) as Kraft would try to reduce costs to operate efficiently and pay back its debts. The company has also not given any formal assurance that it would protect 4500 UK jobs. Also it is a known fact that when a company needs to cut costs, jobs and job conditions suffer.
The British Government also opposes takeovers of British companies by foreign giants as it nearly always leads to job losses. This takeover too was met with resistance including Gordon Brown’s advice and insistence against its happening but the shareholders overruled it and still went ahead with the deal. According to a Union head, “This is a very sad day for U.K. manufacturing. A successful, iconic, independent U.K. brand will now be owned by a giant company with massive debt.”
英國政府也反對外國巨頭收購英國公司，因為這幾乎總是會導(dǎo)致失業(yè)。這次收購也遇到了阻力，包括戈登·布朗的建議和反對它發(fā)生的堅持，但股東否決了它，仍然繼續(xù)進(jìn)行交易。一位工會領(lǐng)袖說:“這是英國制造業(yè)非常悲傷的一天。一個成功的、標(biāo)志性的、獨立的英國品牌現(xiàn)在將被一家負(fù)債累累的大公司擁有。”
In the face of such a scenario, even if employees are laid off it will not affect those who are rich and/ or are major shareholders in the company. For example, if the chairman, Roger Carr gets axed, he would still walk away with $30 million! This proves that it is the low level managers and employees who feel the vulnerability of such an action. According to David Bailey, professor at Coventry University Business School; “Serious questions need to be asked about Kraft’s intentions… Kraft already has a track record of cutting production and moving production abroad… There’s no guarantee that they’ll keep production in the UK in the long run.”
When employees of both companies were interviewed to ask about their view points, most expressed fear and uncertainty. They were resistant to the idea of such a large company where their positions and titles might be reduced or lost due to the massive structure. They are also despondent of their lack of involvement in this decision. According to one employee, “nobody really knows what is going to happen, but it is definitely not going to be pleasant.”
A disadvantage for Kraft’s shareholders of the takeover is that they now mentally feel less financially strong as assets were being sold and the entire pizza production plant worth $3.7 billion was sold to raise money for the takeover.
The Market Theories Being Practiced市場理論的實踐
The Market theory witnessed in such a situation is a combination of globalization practiced over countries and between countries of the two companies having their origins in US and UK. The practice generated by Kraft, in this case, was that of a hostile takeover, where the big company used its aggressive stance on growth to acquire a smaller company. This is a very certain way to achieve company growth. In the event of a significant bid for shares, the shareholders are likely accept the offer but the board of directors more likely to resist. This is exactly what happened with this takeover too, however due to low bid price initially, the shareholders were not inclined towards the idea until the bid became impossible to resist.
在這種情況下目睹的市場理論是一個結(jié)合全球化實踐的國家和國家之間的兩個公司有他們的起源在美國和英國。在這種情況下，卡夫的做法是一種敵意收購，這家大公司利用其對增長的激進(jìn)立場，收購了一家較小的公司。這是實現(xiàn)公司發(fā)展的一個非常肯定的途徑。如果出現(xiàn)大規(guī)模收購，股東可能會接受收購，但董事會更有可能抵制。這正是這次收購發(fā)生的情況，然而由于最初的出價很低，股東們并沒有傾向于這個想法，直到出價變得無法抗拒。
Some Kraft shareholders too were also strongly against this idea, especially Warren Buffett who felt that Kraft was overpaying Cadbury when there was no need for Cadbury’s products in Kraft’s portfolio for long term growth. He expressed his desire of wishing to stop the takeover if he could.
Conclusion結(jié)論
Objectively speaking, when takeovers of such a nature occurs; Two large companies come under one brand name, with the larger one burdened with high debt, the risk of business coming down due to conflicts in operation strategies in the near future are highly likely to occur. These are not realized when the benefits of the takeover are being discussed and third parties involved in its happenings are proactive as they too are making money. These parties are usually the deal makers, lawyers and other advisers who earn their commissions irrespective of whether the deal is eventually a success or a failure.
客觀地說，當(dāng)發(fā)生這種性質(zhì)的接管時;兩家大企業(yè)在同一個品牌下經(jīng)營，如果大企業(yè)負(fù)債累累，短期內(nèi)很有可能出現(xiàn)因經(jīng)營戰(zhàn)略沖突而導(dǎo)致業(yè)務(wù)下滑的風(fēng)險。這些都沒有意識到，當(dāng)收購的利益正在討論和第三方參與其發(fā)生的積極主動，因為他們也在賺錢。這些當(dāng)事人通常是交易撮合者、律師和其他顧問，他們賺取傭金，而不管交易最終是成功還是失敗。
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