The Original Deal Case

500 Words2 Pages
LION CAPITAL AND BLACKSTONE GROUP: THE ORANGINA DEAL a. Why would Lion do a deal with Blackstone? Why would Blackstone do one with Lion? What does each risk? What can each gain? There are a couple of reasons why the companies wanted to join together as a venture group: * The first reason is that the Lion group wanted to be a partner with Blackstone group because the company would cooperate with a fully developed firm, with couple of brands on its site, such as Orangina, Schweppes, Trina, Oasis, Castera etc., with revenues of 956 millions € and reached the third position in Europe after Coca Cola and Pepsi. * The second reason is that the Lion group wanted to become global and cover the American and European markets. The Blackstone group is a firm that had been working in Europe for a quite time after moving from America with a thought that their competitive advantage will be their large equity. * The Lion Capital was a firm with bad marketing and no investments, so that’s why the company needed a firm as Blackstone which will take care of that part. * As mentioned before, the third reason is that the Blackstone group was one of the largest private equity firms in the world with more than $14 billion in private equity. Also the Lion Capital had lost a lot of money in 2004, so the firm needed a venture company that has a big equity. * The Blackstone liked Lion because of their deep knowledge of the customer space and had “buy and build strategy”. In that time a trend in the business world was the buyout fund commitments, according to the exhibit no.1a. * Both companies want to go in the deal with each other because if they don't react fast enough, the company might go for another auction and the cost of the business will rise substantially. b. Is Orangina a good deal? It seems that Lion and Blackstone are paying a pretty
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