Sulzer Takeover Battle Harvard Case Solution & Analysis

IMD-1-0319 © 2011
Hamilton, Stewart; Eckardt, Anna

Sometime during the evening of the 20th of April 2007 a sizeable amount of Sulzer shares had changed hands “off-bourse” – enabling an investment group called Renova to get a powerful 32% position in the Swiss engineering firm within minutes without having disclosed any prior holdings. This disclosure caused a public outcry about how the Swiss icon has been outmanoeuvred.

What expanded Sulzer’s principal bank, the Züricher Kantonal Bank (ZKB) and a few other banks were participated in the corporate raid. As a result numerous bankers involved, including the CEO of the ZKB, had to step down from their places. Ultimately the Swiss Financial Market Supervisory Authority found the largest ever inquiry in the time. It was reasoned after almost three years with the clear verdict that disclosure rights has been disregarded and that the ZKB had seriously infringed its duties towards its customer. The Sulzer case became the trigger for altering the Swiss Stock Exchange Act to conform to the realities of the fast-changing and increasingly creative stock markets. Learning objectives: Understand the realities of Stock Markets; comprehend the demand for vigilance over shareholdings; consciousness of the potential use of non-traditional financial instruments; consideration of possible ethical problems around hostile acquisitions.

Sulzer Takeover Battle case study solution

Subjects: Corporate raid; Takeover; Cash-settled call options
Settings: Switzerland ; Industrial Machinery and Equipment ; Turnover 3.54 billion CHF in 2007; Employees (FTE) 11’599 ; 2006-2009

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