Advanced Corporate Valuation

Running head: ADVANCED CORPORATE VALUATION
Advanced Corporate Valuation
Name of the Student
Name of the University:
Author’s Note

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ADVANCED CORPORATE VALUATION
Executive Summary
The main purpose of this assignment is to analyze the financial predicament which Bega Cheese
ltd faces which is related to acquisition of Mondelēz’s Grocery Business. The assessment will be
advising the shareholders whether the acquisition which the Bega Cheese ltd proposes. The
assessment will be conducting a relative analysis and intrinsic value analysis to determine
whether the transaction which is Bega Cheese ltd proposes to undertake is valid from financial
point of view or not.

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ADVANCED CORPORATE VALUATION
Table of Contents
Introduction......................................................................................................................................2
Overview of the business.................................................................................................................2
Discussion........................................................................................................................................3
Business of Bega Cheese ltd........................................................................................................3
Business of Mondelez Grocery....................................................................................................3
Relative Valuation.......................................................................................................................4
Intrinsic Valuation.......................................................................................................................5
Computation of Weighted Average Cost of Capital....................................................................7
Discounted Cash Flow Analysis and Equity Share Price..............................................................11
Conclusion.....................................................................................................................................13
Reference.......................................................................................................................................14

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ADVANCED CORPORATE VALUATION
Introduction
The main purpose of this assignment is to analyse the business of Bega Cheese ltd and
the acquisition plan which the business intends to follow. The plan of the management if Bega
Cheese ltd is to acquire the business of Mondelez Grocery business which is a part of the ANZ
grocery business. The management of Bega Cheese ltd wants to further diversify the business
and penetrate into new businesses.
Overview of the business
Bega Cheese ltd is an Australian company which is engaged in dairy business and
manufacture of dairy based products of the business. As per the current estimates of the business,
the company is regarded as one of the leading dairy companies in Australia and it is also
estimated that the market valuation of Bega Cheese ltd is around $ 775 million. The company
has its origins as early as 1850 when the farmers of Bega valley started selling milk products. It
was in 1899 when the actual company was established and the company started manufacturing
other dairy products which are quite successful in the market.
Discussion
Business of Bega Cheese ltd
As per the case study which is provided in the assessment, the management of Bega
Cheese ltd is planning to acquire the property of Mondelez Grocery. The reason for the
diversification which can be identified from the case study is the continuous turmoil and intense
competition which was there in the dairy industry. The business of Bega Cheese ltd was affected
due to such excessive and intense competition. Therefore, the management wanted to diversify