A consumer staples behemoth : the acquisition of Kimberly-Clark by Kraft-Heinz

• Autor(a) principal: Ricardo, Daniel Jorge Carvalho
• Data de Publicação: 2018
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.14/25887
• topic: Acquisition; Synergies; Premium; Consumer staples; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

The main purpose of this dissertation is to study the hypothesis of an acquisition in the consumer staples sector, between Kraft-Heinz (the acquirer) and Kimberly-Clark (the target). Kraft-Heinz is a consumer staples company that recently completed the integration of a past merger, and is rumored to be looking for new targets to acquire. Its owners traditionally seek to acquire companies within the same industry, with strong brands and improvable operating margins. Kimberly-Clark is a company belonging to the consumer staples industry and the owner of several well-known brands. While it is smaller than Kraft-Heinz, it is expected to generate higher revenue growth in the foreseeable future, and its operational profitability possesses room for improvement. The combination of the two companies would allow for small increments in revenues, through combined scale and market power, and lead to operational improvements in Kimberly-Clark, following the Kraft-Heinz’ battle-hardened methods and culture. The combined company would also invest heavily in state-of-the-art facilities, while divesting older plants and reducing work-force. The expected synergies arriving from the deal were valued at $28 906 Million. The transaction assumes an all-cash friendly offer of $49 888 Million for 100% of Kimberly-Clark, representing a premium of 40.8% over Kimberly-Clark’s stock price.