Sree Harsha Vadlamudi’s Post

THE MISSING PIECE IN M&A: How to uncover the cultural (mis)fit? ⚠️   🚀 Carlsberg Group's imminent acquisition of the British soft drink producer Britvic plc is grabbing headlines with its significant commercial opportunities. But how do you account for the cultural assets and liabilities - and how do you realize the human potential of two combined organizations? 📉 We know that around 30% of all mergers and acquisitions fail to achieve their financial and commercial targets primarily due to cultural issues. Just examining the latest 15x cultural due diligences (CDD) we in Voluntās have conducted for our partners reveals a cultural fit averaging only 53%. The highest we have ever recorded was 77%, underscoring that, despite strong commercial, legal, and financial rationale, the importance of integrating cultural considerations to ensure the overall success of mergers and acquisitions is absolutely key. From being the lead partner on +20 cultural due diligences the past 3 years, my takeaway is that a proper approach is one that... 🔍 ... moves beyond the "professional gut feeling" to a data-driven mapping of the dominating cultural preferences in each organization. 🔍 ... moves beyond the glitter & glamour of the beauty contest to a structured, honest, and brutally self-aware conversation about the key cultural assets and liabilities in each organization - with the buyer taking the first bold step. 🔍 ... moves beyond culture as an immaterial add-on to using the same rigor around people data in the data room and the human hopes and concerns as with any other aspect of the due diligence. At least, through this approach, we have managed to uncover everything from slightly sexist tendencies, definite narcissism, and psychological unsafety to false concerns, quick wins, and even the ability to achieve a significant discount on the enterprise valuation - because the buyer proves their diligence around culture in the process, which gives a clear competitive edge especially among founder-driven or family-owned sellers. These findings not only informs the go/no-go decision, but most importantly how to manage the subsequent post-merger integration plans in the most meaningful way. But with every new cultural due diligence, we are still learning. Please share any relevant insights, learnings or readings on this topic!

As part of the majority of our M&A work in Voluntās, I am +1 to everything that Nicolai E. E. Iversen points out in this post👇🏻. Culture, organization, and leadership are crucial for a successful transaction, yet they are continuously underprioritized. Our point of view is that this isn't due to bad intentions but because the tools to measure these elements are scarce🤷🏻♀️. However, echoing J.F.K., we choose to develop and implement the CDD™️ with our partners ranging from companies and PE-fonds not because it is easy, but because it is hard.

The Competition Authority of Kenya has approved the proposed acquisition of the entire issued share capital of Suntory Beverage & Food Kenya Limited by Bidcoro Africa Limited unconditionally. This approval has been granted based on the finding that the transaction is unlikely to negatively impact competition in the market for non-alcoholic ready-to-drink (NARTD) beverages, nor elicit negative public interest concern. These are key considerations during the analysis of mergers. Bidcoro Africa Limited (Bidcoro) is a company incorporated in Kenya. It is involved in the manufacturing, processing, marketing and sale of concentrates (cordials/syrups/squashes), soft drinks, and ice lollies. Some of Bidcoro’s brands are; Suntop, Sunquick, Suncola. Suntory Beverage & Food Kenya Limited (Suntory Kenya) is also incorporated in Kenya and is wholly owned by Suntory Beverage & Food Asia Pte. Ltd. Suntory Kenya is involved in the manufacture, processing, distribution and sale of soft drinks beverages under the brand names Ribena and Lucozade. The proposed transaction involves the acquisition of the entire issued share capital of Suntory Kenya by Bidcoro. The parties indicated that the rationale of the transaction is addressing the target's underperformance by leveraging on the acquirer’s production and commercialization expertise.

Is this how Georgia’s Daily and Magniti merger will revolutionise retail across the Caucasus? The merger of Daily Group and Zedazeni Group, as detailed by Shota Tkeshelashvili in Business Media Georgia (BMG), is more than just a corporate transaction, it’s a transformative moment for the retail and beverage sectors in Georgia and potentially beyond. Consider this: - მაგნიტი • Magniti stores, part of the newly formed entity, are now included in a network of over 1,600 locations, including well-known supermarket brands such as SPAR Georgia, and გვირილა • Gvirila. - The partnership unites Daily Group’s retail expertise with Zedazeni Group’s production powerhouse, which includes its subsidiary, the ZEDAZENI - The Georgian Beer Company J.S.C, known for iconic beverages like Zedazen lemonade and RS Cola. - With this merger, the group not only secures 30% of Georgia’s organised retail market but also enhances logistics capabilities through hubs in Tbilisi and western Georgia. The Challenge: While the merger solidifies a dominant position in Georgia, could this be the foundation for a regional retail and beverage giant? Here’s the truth: Retailers that invest in cross-sector synergies, like blending manufacturing expertise with retail reach, gain a competitive edge. This new holding has the scale and resources to lead innovation in both the Caucasus and Eastern Europe. The world needs: - Integrated strategies that combine retail and production for efficient, customer-focused supply chains. - Regional ambitions that expand networks into neighbouring markets to drive growth. - Consumer trust resulting from offering high-quality products through brands that resonate locally and internationally. This is not just about Magniti or Georgian Beer Company; it’s about reshaping what a retail and beverage conglomerate can achieve. Could this merger signal the rise of a regional retail powerhouse? Share your thoughts below. #MagnitiStores #RetailExpansion #DailyGroup #ZedazeniGroup #CaucasusMarkets

As consumption of bottled water grows, two industry juggernauts are combining in an effort to dominate the sector. Primo Water and an affiliate of beverage company BlueTriton Brands announced Monday they are merging to create a diversified water giant with a presence in small portable bottles and large containers. The new company, which is expected to post net revenue of $6.5 billion, will oversee a portfolio serving millions of consumers across different product formats, channels, price points and usage occasions. BlueTriton’s brands include Poland Spring, Deer Park, Ozarka, Ice Mountain and Pure Life, while Primo is best known for its larger containers found in homes and office buildings. The firms noted that retail sales of bottled water have grown from $17 billion in 2018 to $25 billion a year ago. The sector shows no sign of slowing down. The CPG company will have plenty of opportunities to capture growth in water going forward. It plans to expand into new channels and high-potential geographies, drive innovation in functional, flavored and premium segments and scale its fast-growing filtration business. The merger is supposed to close in the first half of 2025.

Mondelēz International continues expansion into cakes & pastries with the acquisition of Evirth - China's category leader for frozen-to-chilled cakes and pastries The move comes after the acquisitions of other players in the same space: Give & Go in North America (2020), and Chipita in the EU (2022). After securing footholds in its key geographies, Mondelez expanded its pastries business in China with the acquisition of Evirth, a company with which it has had a strategic partnership since 2021 What we like: - Attractive space (large: ~$3bn, fast-growing: ~15% CAGR, fragmented, currently mostly unbranded value propositions and consumer tailwinds: premiumization) - Complementary assets with portfolio & GTM synergies - Ownable right to win considering MDLZ assets - Proven fit (already having partnership since '21) - Repeatable M&A model This is a great case of synergistic M&A with a high right to succeed! 𝗔𝗯𝗼𝘂𝘁 𝘂𝘀: FF&A solves the most complex strategic problems of the world's largest FMCG companies across Corporate Strategy, Organic Growth, Digital RTM (eCommerce, DTC, and EB2B), and M&A. 14 out of the world's 20 largest FMCG companies are repeat Clients 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀 & 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #strategy #fmcg #cpg #mergersandacquisitions

The retail world is abuzz as Japan’s 7-Eleven, the largest convenience store chain globally, with 85,000 outlets, receives a buyout offer from its Canadian rival, Alimentation Couche-Tard. This proposed acquisition, valuing Seven & i Holdings at over $30 billion, could mark the first time a Japanese giant of this scale is acquired by a foreign firm. 7-Eleven’s success, especially in Asia, stems from its unique ability to offer quick, delicious meals that resonate with local tastes. From its iconic rice balls in Japan to the viral ham and cheese toastie in Thailand, 7-Eleven has become more than just a convenience store—it's a cultural phenomenon. The chain is also expanding its reach in the US and Europe, focusing on fresh food to attract more customers. As this deal progresses, it signals a shift in Japan’s corporate landscape, with a greater openness to foreign investment. Could this be the start of a new era of international acquisitions in Japan? Stay tuned as 7-Eleven’s global journey continues! 🌍✨ #RetailNews #7Eleven #GlobalBusiness #MergersAndAcquisitions #Japan #ConvenienceStores #ThesocialTalks

🌍 Global F&B landscape shifts 🌍 From Grupo Bimbo expanding its #LATAM footprint to the launch of an @AfricanCocoaMarketplace, the global #food and #beverage industry is seeing some dynamic moves. 💼 We explore Bimbo’s latest acquisitions, Campbell's proposed rebrand and @Boundless’ rise as the UK’s #1 gut-health snack leader. 🚀 Add in pladis Global’s MENAI HQ and the @WCF’s push for #EUDR compliance, and the future of food is rapidly evolving. Read more: https://lnkd.in/eKaVCkQn What impact will these moves have on the industry? 🌱👀 #FoodInnovation #GlobalExpansion #Sustainability #GutHealth #FMCG @PrimaBakeries @FurnissofCornwall Kellanova BeyondSKU

Big news in the beverage sector: Britvic remains steadfast, rebuffing a hefty £3.1bn Carlsberg bid. Despite the tempting offer, the British soft drinks company stands firm, holding out for a value reflecting its true potential. In the world of mergers and acquisitions, few moves are as intriguing as this. Just weeks ago, on June 11th, Carlsberg laid its second proposal on Britvic's table—1,250 pence a share—to which Britvic's board responded with a resolute "no." This followed an initial snubbed offer on June 6th, with the takeover saga turning as fizzy as the drinks in question. Britvic's stance? The bid "significantly undervalues" their worth and future prospects. They're banking on their current strategies and market position to yield greater fruit in the long run, echoing confidence to shareholders. Though they have pledged to consider future proposals in good faith, the message is loud and clear: Britvic sees a sparkling future that's worth more than the proposed billions. Carlsberg, for its part, portrays the bid as a full, attractive cash valuation for shareholders—an opportunity for them to cash out at what Carlsberg views as an 'attractive valuation'. But they've also noted they'll remain disciplined, moving forward only if the deal aligns strategically and financially with their interests. Cash-heavy and based on a strategy of debt financing, the beer giant is mulling its next move. What speaks volumes here is the dance of valuations and expectations. Britvic's brands, market position, and trajectory no doubt play a leading role in their rebuttal. Yet, Carlsberg's persistence reveals their belief in the long-term growth potential simmering within Britvic's diverse portfolio, eyeing a lucrative pivot into the soft drinks segment, adding fizz to their well-established beer credentials. It's a riveting chapter in the business narrative, underscoring the weight of strategic value over immediate financial gain. Will Carlsberg return with an offer too good to refuse? Or will Britvic's resilience see them going solo, banking on an effervescent future? Only time will tell. #Britvic #Carlsberg #BusinessStrategy

Concerns arise over MEGA IMAGE - Ahold Delhaize Group‘s acquisition of Profi, by Nine O’Clock The Competition Council has a number of competitive concerns regarding the transaction through which Delhaize “The Lion” Nederland B.V. (Mega Image) is acquiring Profi Rom Food S.R.L, The concerns arising from the analysis conducted by the competition authority target both the retail market and the procurement market for predominantly food consumer goods. “As you know, the European Commission agreed to transfer the analysis of this case to us, at our request, given that the Romanian market is the most affected. This is the largest transaction in the retail market in Romania, and a complex analysis is required. That is why we are consulting with authorities in other member states that have managed similar transactions, but we also want to hear the views of those affected: agricultural producers and processors, competitors, consumer associations,” said Bogdan Chiritoiu, President of the Competition Council / Consiliul Concurenţei. #newsfromcompanies #mega #Profi #Romanianews #Nineoclocknews #viaprofi #FoodSafety #ConsumerHealth #NINEOCLOCK https://lnkd.in/dUmvDBY8