H.J. Heinz M&A Harvard Case Solution & Analysis

H.J. Heinz M&A Case Solution

Interest and Strategies

Heinz was the most successful company in the field of consumer food industry, however the decline in ther atio of profits had led the company to sell for expansion in other regions of the world. For that, merger and acquisition were the best options to overcome the losses as well as to increase the market value in other parts of the world. 3M company and Berkshire were quite interested in the acquisition with Heinz however, the situation was not favourable to them because of the expected results proposed by out-spoke investor (Nelson Peltz).

h.j. heinz m&a case solution

h.j. heinz m&a case solution

Role played by Nelson Peltz

Nelson Peltz wanted the company to reduce the non-core assets and other extra activities by the use of liquidation in order to recapitalizefor expansion in the operation size and efficiency. They proposed that Heinz should repurchase the stocks from the activity of liquidation and try to reduce the risk of over-costing. They would be interested in the proposal of acquisition made by 3M Company and Berkshire but wanted to increase the market worth before.Therefore, this would help to increase the valuation of the company as well as seek for the opportunity to take competitive advantage in the selected countries.

Position of stack holders within Heinz

Under the agreement of merger and acquisition, many participants were involved in order to show the interest for the given proposal offered by Berkshire and 3M Company. The shareholders were somehow the key participants in the company because they had already invested heavy amounts to receive desire level of dividends, however certain changes could damage the expected returns or increase the level of dividend per share after acquisition.So a mix picture of feedback had taken to consider whether the acquisition could benefit or not.

Some shareholders of the company were in the form of investment advisors, banks and other investors, who invested some stack within a company and had the authority to make decisions about the future expected results provided by Heinz. However, majority of them were in favour of acquisition because of the high value of per share offered by the acquirer.

The management was the main source to control the company’s operation, therefore according to the positive response from the shareholders regarding the acquisition of Heinz, they were engaged to perform the process of acquisition through legal terms,termination offer and autonomy after the merge.

The other responsibilities included the disclosure of information to the shareholders in order to know the expected future results generated by the Heinz. Therefore, without the efforts of management, the shareholders would not know about the company’s operational activities.

Employees somehow played the same role of management as they were directly involved in the operation of the company and linked with the management in order to provide better results for the growth.

The citizens of Pittsburgh were confused about the decision of acquisition because they knew that the operations might relocate into other regions or parts in the world and that could hurt the relationships with the company.

This could decrease the market demand of the company’s products because if the relocation would take place, then the goods might be imported to the country with high prices due to import duties and would distract the response of the citizens within Pittsburgh. Thus, according to the expected contingencies, the citizens would disagree with the proposal of acquisition by 3M Company and Berkshire.

Go-shop process

The most important part of the strategy for the company was to enter in a go-shop process because it was followed by different alternative decisions, either of these could be accepted if the termination of merger and acquisition occurred before completion of the process. This would decrease the level of risk for the company because it might allow to manage the losses in the form of alternative processes of acquisition.................

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