Nestle Merger Essay

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Business & Corporate Strategy Team 1 Nestle Acquisition of Mead Johnson Udayan Sathe, Efesa Origbo, Shen Ge, Abhishek Singh 4/27/2011 Table of Contents Executive Summary 3 Nestle 3 Brief Profile 3 Business and Corporate Level Strategies 3 Financial Performance 3 SWOT Analysis 3 STRENGTHS 3 WEAKNESS 3 OPPORTUNITIES 3 THREATS 3 Industry Analysis 3 SUPPLIERS 3 BUYERS 3 SUBSTITUTE PRODUCTS 3 THREAT OF NEW ENTRANTS 3 INTER-FIRM RIVALRY 3 Industry Market for Acquisition 3 Potential Acquisition Targets 3 1. Mead Johnson Nutrition (MJN) Company 3 2. Groupe Danone 3 Recommendation Rationale 3 Benefits of Acquisition 3 Target Valuation 3 Financial Analysis 3 Mead Johnson 3 Nestle 3 Pro forma Income Statement 3 Risk Analysis & Mitigation Strategies 3 Conclusion 3 References 3 Executive Summary A major step in Nestlé's transformation into the world's leading nutrition, health and wellness company is the acquisition of other leading companies in the field. Its recent acquisition of Gerber has given it a strong foothold in the US in baby food. However, there’s still the profitable infant formula market and emerging markets in Asia and Africa which Nestle does not have a strong presence. A suitable acquisition target will bolster these weaknesses and expand Nestle’s product portfolio to greater align with its current health and wellness focus. Similar to Gerber, the integration, which brings together two category leaders, extends Nestlé’s brand and geographic presence as well as its global leadership in infant nutrition. This will allow Nestle to leverage innovation to serve consumers better via expertise in nutritional science and pioneer brand heritage, its current strong points. All these will build a stronger competitive edge and open up greater opportunities for Nestle. Mead Johnson is the premiere brand for infant formulas

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