Philip Morris - Kraft Case - 1996 Words

†Philip Morris - Kraft† Case Nurettin Y ¨cesu (10516099) - PÄ ±nar Dilhan Eldemir (10652007) u April 25, 2011 1 Introduction In this case, we will analyse how a hostile takeover creates beneï ¬ ts for both parties. The hostile takover approach can be considered as †taking over a company with a hostile manner† but with the oï ¬â‚¬ers and deals, it becomes a solution to many diï ¬â‚¬erent structures within the company. The decisionmaking through a case as this requires experienced, rational management skills to take the right position with a right choice. The one of the world’s biggest packed food company, Kraft Foods Inc. has so many innovations and mergers on the same sector. Kraft has been started to work on the cheese sector and generated many†¦show more content†¦PM generated its sales and proï ¬ ts from its own business segment, that is, tobacco segment. One of the reasons of acquisitions is declines in tobacco consumptions. To create an suï ¬Æ'cient market share in the sector, PM had had to make some acquisitions. In those years, the reasonable one was to buyout some ï ¬ rms in the food and brewery industry and according to our visual, these sectors are good choices. Because these sectors was vital and bubils of the market. In that period, Grand Metropolitan bid for Pillsburry. All these merges had been increasing the net earnings and book value of common stocks. PM had had to consent higher price but according to our vision this merge is beneï ¬ cial for both of them as done for other ï ¬ rms. Miller Brewery Company and General Food has brougth a success to PM but not so much. Kraft was an all food business and they had completed divestiture of Duracell. Nominately, They was doing their best. Meanwhile, PM is strategically successful by decision of acquisition of Kraft. Bid for Kraft was almost more than 73 times Kraft’s book value of the common stocks. 3 The Merger After the negotiation period, Philip Morris and Kraft negotiated with an agreed price nominated in $106/sh. In our opinions, this acquisition was a well-process. Because the beneï ¬ ts which we will discuss in the conclusion section, from this merger is bigger than the losses. After merger if we look to the behavior of the market, theShow MoreRelatedEssay on Kraft Case Study1464 Words   |  6 Pagespurpose of this Case Analysis Report is to advise Philip Morris on the Acquisition of Kraft Inc. Overview Kraft is a food-focused company with many well known brand names. In 1987 net sales were $9.9 billion which was an increase of 27% over the previous year., and net income increased by 11% to $435 million. This follows an earlier attempt to diversify where in 1980 Kraft merged with Dart Industries and then acquiring Hobart Corporation in 1981. 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