Brahma vs Antarctica
Brahma VS Antarctica
Part-time International MBA
PT IMBA-G 2007-2008
Brahma Vs Antarctica
International Management
Prof Dr Rollie Lal
Kristof Geilenkotten
2008-03-13
Brahma VS Antarctica
Overview:
When considering the merger several aspects have to be taken into account. Table 1 provides an overview of these aspects.
Merger
Reasons against
75% of home market, there is a chance for regulatory actions Combined, there is sufficient scale to compete globally
Merger of large companies is always a high risk
Antarctica also has 1 large new factory
Low Real, can it compete against global players
Both companies have a similar strategy. Telles can focus The recent price war might have eaten the reserves on the execution
Low brand preference, making the actual brand value of
Antarctica low
Antarctica has a lot of small not so productive factories
High debt of Antarctica
Reasons for
A global player could potentially merge with Antarctica
Table 1 : Advantages and disadvantages of merger
Financially:
The depreciation of the Real makes Antarctica ripe for takeover, but one must not forget that compared to the observer outside of Brazil the depreciation has a double benefit. The current financial assets of the company have decreased and the debts in $ have not increased.
Therefore, before Brahma considers a merger with Antarctica, due diligence is needed not only for Antarctica but also for Brahma. There is possible risk that the merger of both companies might weaken both and prepare the new merged company for a hostile takeover from another global player. As the recent price war (15% between 1997 and 1999) has weakened Antarctica before the inflation of the Real, it cannot have left Brahma completely unharmed.
Operationally:
Another important aspect is that Marcel Telles has successfully guided the company through a lot of changes in the last 10 years and is Brahma ready now to merge with Antarctica. Are all the
procedures
Part-time International MBA
PT IMBA-G 2007-2008
Brahma Vs Antarctica
International Management
Prof Dr Rollie Lal
Kristof Geilenkotten
2008-03-13
Brahma VS Antarctica
Overview:
When considering the merger several aspects have to be taken into account. Table 1 provides an overview of these aspects.
Merger
Reasons against
75% of home market, there is a chance for regulatory actions Combined, there is sufficient scale to compete globally
Merger of large companies is always a high risk
Antarctica also has 1 large new factory
Low Real, can it compete against global players
Both companies have a similar strategy. Telles can focus The recent price war might have eaten the reserves on the execution
Low brand preference, making the actual brand value of
Antarctica low
Antarctica has a lot of small not so productive factories
High debt of Antarctica
Reasons for
A global player could potentially merge with Antarctica
Table 1 : Advantages and disadvantages of merger
Financially:
The depreciation of the Real makes Antarctica ripe for takeover, but one must not forget that compared to the observer outside of Brazil the depreciation has a double benefit. The current financial assets of the company have decreased and the debts in $ have not increased.
Therefore, before Brahma considers a merger with Antarctica, due diligence is needed not only for Antarctica but also for Brahma. There is possible risk that the merger of both companies might weaken both and prepare the new merged company for a hostile takeover from another global player. As the recent price war (15% between 1997 and 1999) has weakened Antarctica before the inflation of the Real, it cannot have left Brahma completely unharmed.
Operationally:
Another important aspect is that Marcel Telles has successfully guided the company through a lot of changes in the last 10 years and is Brahma ready now to merge with Antarctica. Are all the
procedures