M&A and Private Equity

Task 1 (30%)
Chocolate Wars – Kraft’s acquisition of Cadbury
You are an independent business analyst, and you have been approached by representatives of Kraft Foods Group, Inc., a U.S. food manufacturing conglomerate.
With the benefit of hindsight, they have asked you to look back at Kraft’s acquisition of Cadbury, a British confectionary producer, and provide an analysis of the takeover process.
Kraft’s executives are mostly interested in assessing whether the hostile takeover of Cadbury was successful, the extent of the damage done to the company’s culture due to the forced nature of the acquisition, and whether it could have been done differently. They are also very concerned about whether the bad public image of Kraft’s brand which this deal has created in the U.S. will have a lasting, damaging effect on the conglomerate’s operations.
Address the following issues in your report:
1) Evaluate the execution of the hostile takeover and suggest what other strategy could have been employed in this situation.
2) Analyse the success of the integration of Cadbury into Kraft’s business operations. Critically appraise whether the hostility of the takeover negatively influenced the process and how the negative perception of the deal influenced Kraft’s operations in the UK.

Task 2 (70%)
Transformation of the Pharmaceutical Industry
No industry has seen as much fervent activity in the last 15 years as the pharmaceutical industry. Since Pfizer bought Warner-Lambert in January 2000, at least 10 deals with a value higher than 40 billion U.S. dollars have been made. Thanks to this transformation, the pharmaceutical industry became truly global, and the efforts to develop new drugs got much greater financial backing.
Write a report on this industry transformation. Address the following issues in your paper:

Guidelines
1) Critically analyse what drove this wave of mergers and acquisitions. Concentrate on synergies (both operational and financial), tax issues, research costs, marketing, and other kinds of drivers.
2) Choose one specific deal exceeding 40 billion dollars and synthesise its benefits and costs. Critically evaluate whether it has fulfilled its shareholders’ objectives.
3) Perform a critical analysis of the deal you chose from a financial point of view. Explore the value of the deal and whether it can be judged as justified (use discounted value analysis and comparable transaction analysis in your reasoning). Explore the stock prices prior to and after the acquisition and analyse these moves critically.