Growth by Merger: Long Term Analysis of Multinational Companies

This research proposes to provide an in-depth examination of Heinz's efficiency and success for investors following the merger of Heinz and Kraft, two food manufacturing behemoths, in July 2015. The study aims to evaluate the effectiveness of mergers and acquisitions in company success.

Proposal

Contents
INTRODUCTION...........................................................................................................................................3
AIMS AND OBJECTIVES................................................................................................................................3
LITERATURE SURVEY....................................................................................................................................4
4. Methodology...........................................................................................................................................5
5. scope and constraints..............................................................................................................................6
6. Resources................................................................................................................................................7
7. Time table................................................................................................................................................7
REFERENCES..............................................................................................................................................13

Title: “Growth by merger: A long term analysis of multinational companies”
INTRODUCTION
Mergers and acquisitions are one of the quickest methods to build a business (M&A). Whenever
a firm expands quickly via M&A, managers and shareholders must accept that not all
acquisitions will be successes. Businesses can profit from revenue synergy in a variety of ways,
along with the people who follow: Minimize your competitors. Explore new areas. Gain access
to markets. The merged company must cope with various market presences, a bigger and more
diversified client base, a more complicated product offerings range, and a high degree of human
and administrative complexities. Cost efficiencies, a measurable and often immediately
achievable objective, take priority over the arduous task of developing, identifying, and
measuring income measurements and development attempts (Adnan, Hay and van Staden, 2018).
This research proposes to provide an in-depth examination of Heinz's efficiency and
success for investors following the merger of Heinz and Kraft, two food manufacturing
behemoths, in July 2015. More into the study, a financial report of the firm's merging will be
performed to learn about the merger performance through time in order to determine the worth of
the Heinz merger.
Importance of research: Such analysis gives knowledge to creditors and stakeholders by
advising them on merger efficiency and value development.
AIMS AND OBJECTIVES
The purpose of this study is to look into Heinz's position financially and wealth generation
before and after the transaction. This is a significant merger in the food manufacturing business.
• To have proper knowledge and understanding of merger and acquisition concept and its
effectiveness in company success.
• To evaluate different problems that Heinz can face after the merger
• To analysis pre and post merger situation of company in detailed manner
Research question
Does the Heinz and Kraft merger deliver value and achieve expectations?

LITERATURE SURVEY
This is an important part of any research project since it includes the evaluation and
surveying of secondary material, which is critical for establishing a structure and a foundation
for a study.
Mergers allow organizations to broaden their reach, enter new markets, or acquire customer
base. A merger is the deliberate combination of two businesses on roughly equal conditions into
one company or group. Conglomerate, great constitutional, market expansion, vertical, and
horizontal merger are the five major types of merging. A merger of firms eliminates rivalry
amongst them, lowering the cost of promotional efforts. Furthermore, the price decrease will
help the customers and subsequently improve sales. Mergers may lead to improved fiscal
resources development and usage (Aguilera, Marano and Haxhi, 2019).
On July 2, 2015, the merger between Kraft Foods Group Inc. (Kraft) and a fully owned
subsidiary of H. J. Heinz Holding Corporation was concluded and concluded throughout a
system of exchange. Result of the merger, the corporation was divided into 3 notifiable parts due
to geographical areas. The three regions were America, Canada, and Europe. The additional
firms were merged and categorized as "Rest of the World." The combined firm had around $28
billion in revenue, with 8 $1 billion+ brands and 5 $500 million to $1 billion companies. The
transaction was worth $45 billion. The current Heinz stockholders controlled 51 percent of the
newly created business underneath the conditions of the merger.
Other Kraft stockholders would own the other 49 percent of Kraft Heinz as a publicly
listed corporation. Furthermore, involved in mergers, every share of the Kraft Foods Group firm
would amount to exactly one share of the new corporation. The extra owners would also get $10
billion in total dividends paid by 3G Capital and Berkshire Holdings, which equaled to around
$16.50 per share. The anticipation for this new corporation were enormous, with stockholders
anticipating huge profits, lower expenses, and a greater global impact. Because of Heinz's global
presence, the merger planned to enhance sales and profits by introducing some of Kraft's well-
known brands, including A.1, Velveeta, MiO, Hamburger helper, and Seeds, to the world
market. They also envisioned cost savings in the form of reduced human capital, and also
improved negotiating leverage with retail locations, eateries, and food manufacturers (Bhagat and
Bolton, 2019).

Kraft Heinz reported a dip in sales in the penultimate quarter preceding their merger, as
analysts kept a close eye on the success of the newest Warren Buffett-3G Capital alliance. Since
of weaker quantity and pricing, earnings of America's third-largest foodservice firm fell 4.9
percent to $4.5 billion, lacking in terms of market projections. Nevertheless, the report showed
operating profits of 92 cents, a 15% rise year on year and beyond of growth forecasts, due in part
to an auction process and unrealizable profits from portfolio diversification. Shareholders
anticipate awesome work from the merger. 3G has demonstrated its ability to cut big expenses
from firms it manages, and its effectiveness in raising operating profits at businesses it has
acquired over has established them a model for competitors in the food industry (Gerged, 2021).
The business is being tempted to spend better intelligently, reduce expenses, and offer
goods that meet customer desires for healthy alternatives with more ingredients as a result of
customer revolutions in food preferences and need for affordability. In 2013, the Buffett-3G
alliance acquired Heinz. Second-quarter sales were down and the firm's destruction increased,
indicating that this is still being simplified in a difficult overall economy. Heinz suffered a
decline of 91 dollars a share, comparing to a loss of 14 cents per share a year earlier, on sales that
fell 4.1% to $2.6 billion. Heinz, which has considerably larger worldwide presence than Kraft,
was particularly severely hurt by the rising dollar. It also sold a firm in the United Kingdom
(Ghasmi and et.al, 2019).
4. Methodology
It forms out a vital and crucial section of a research project that tend to reflect and comprises of the
selection and use of the systematic nature of the methods for undertaking and carry out an project in
improved and better manner. there are various set of reach method and approaches a discussion about
which is provided below to ensure and have the selection of best possible and appropriate set of the
method based on nature if current study:
Research philosophy- there are two main types and forms of the Research philosophy that tend to
comprises and includes of the use of the positivisms and interpretivisim Research philosophy. Out of
these two types of the Research philosophy making use of the interpretivisim Research philosophy is
suggested and proposed for current project as it supports a systematic and better generalisation of the data
in theoretical and detailed manner thus present better review of growth by merger for multinational
company (Bhimavarapu and Rastogi, 2020).

Research approach- the two most commonly used Research approach tend to comprise and includes
of the inductive and deductive Research approach out of which use of inductive Research approach is
being suggest and recommended for the current project. The reason and justification for making the use of
the inductive approach is based in the fact that it is inline with the and interpretivisim Research
philosophy and also brings better review and analysis of the theoretical form of data. Along with this, the
use of the inductive approach is also suitable and justifiable as it lead to better generalisation of facts top
effectively meet the set objective.
Choice of method- there are two main types of research method comprising of the qualitative and
quantitative method. It has been seen and analysed that the use of the Quantitative data will be used for
collection of numeric fact of data that tend to be measuring the performance as well as support the
comparison and analysis of numeric data. Beside this, on the other hand the use of the Qualitative data
will be used for interpretation of the outcome in detailed and theoretical manner. Thus, for current project
making use of the qualitative nature of method is being suggested as it supports a detailed way of
reviewing the set objective to ensure timely and better achievement.
Data collection- basically there are two common source from where data is being collected that
includes of the primary and secondary source of data. With respect to the nature of the current study the
making use of the secondary source of data is being proposed as it supports and lead to time and cost
efficient way of data collection. Further, the use of the online set of journals, books, article and other set
of e-literature would be made for analysis of secondary form of data. Beside this, secondary source of
data analysis and collection supports a better base and framework for undertaking current project based
on review of pre-exiting set of data.
5. scope and constraints
The current project is tend to have a wide scope as it tend to focus and emphasis on better review of the
Growth by merger that include sand comprise of the a long term analysis of Multi-National Companies.
Thus, it tend to present and reflect about the effective ways of the growth and adaption for multinational
companies which enhance its overall scope and significance level for multinational companies. Along
with this, it has been also seen and find out that the current study is having valid and effective contracts as
it tend to supports a more effective way for the leading higher knowledge and understanding level within
the researcher. Apart from this, it has been also seen and implicated that the current study is having wide
scope for researcher and scholar also as it tend to lead to and supports the better implication of the
understanding and skill level.

6. Resources
Use of various set of resources is being made within undertaking a research work that consists and
comprises of financial resources, technical resources, human resources, etc. The use of the financial
resources has been made within current project to effectively meet the expenditure of the project that is
required to carry out various activity such as transportation, data collection and analysis, etc. Beside this,
use of human resources has been made within current project in form of the colleagues and tutor and
other people who are directly or indirectly associated with current project. Further, it has been seen and
analysed that the technical resource are also being used within the current project in form of the
computer, internet, MS words, etc. for effective recording and presentation of facts. Use of e-library,
books, online article and journals etc. has been also made comprising of technical resources to effectively
undertake and carry out current project.
7. Time table
Activ
ities
1st
week
2nd
week
3rd
week
4th
week
5th
week
6th
week
7th
week
8th
week
9th
week
10th
week
11th
week
12th
week
13th
week
Selec
tion
of
resea
rch
topic

Deve
lopin
g
aims
and
objec
tives
along
with
frami
ng
resea
rch
quest
ions
with
regar
d to
topic
Draft
ing
resea
rch
prop
osal.
Perfo
rmin
g
litera
ture

revie
w
with
the
devel
opme
nt of
them
es.
Asse
ssme
nt
along
with
select
ion
of
resea
rch
meth
odolo
gy
Form
ing
quest
ionna
ire
consi
sting
of

both
close
ende
d and
open-
ende
d
quest
ions.
Colle
ction
of
data
throu
gh
quest
ionna
ire.
Anal
ysing
the
colle
cted
data
Draw
ing
concl
usion
.

Reco
mme
nding
vario
us
strate
gies
for
resol
ving
issue
regar
ding
demo
tivati
on.
Arra
nging
repor
t in a
struct
ured
mann
er.
Cons
ultati
on
with
tutor.
Perfo

rmin
g
modi
ficati
on if
any.
Final
subm
issio
n.

REFERENCES
Books and Journal
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governance on corporate social responsibility disclosure: A cross country analysis.
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Aguilera, R. V., Marano, V. and Haxhi, I., 2019. International corporate governance: A review
and opportunities for future research. Journal of International Business Studies. 50(4).
pp.457-498.
Bhagat, S. and Bolton, B., 2019. Corporate governance and firm performance: The sequel.
Journal of Corporate Finance. 58. pp.142-168.
Bhimavarapu, V. M. and Rastogi, S., 2020. Valuation of Transparency-A Systematic Literature
Review Paper.Test Engineering and Management.83. pp.9092-9102.
Gerged, A. M., 2021. Factors affecting corporate environmental disclosure in emerging markets:
The role of corporate governance structures. Business Strategy and the Environment.
30(1). pp.609-629.
Ghasmi, H. R. and et.al, 2019. role of government dependence In analyzing the efficiency and
transparency of the company. Journal of Governmental Accounting. 5(1). pp.69-84.
Han, Y. and Robertson, P.J., 2021. Public Employee Accountability: An Empirical Examination
of a Nomological Network. Public Performance & Management Review. 44(3). pp.494-
522.
Heimstädt, M. and Dobusch, L., 2020. Transparency and accountability: Causal, critical and
constructive perspectives.Organization Theory. 1(4). p.2631787720964216.
Koroleva, E. and Tikhomirova, M., 2021, November. Firm Performance: Is Transparency
Important?. In ECMLG 2021 17th European Conference on Management, Leadership and
Governance (p. 261). Academic Conferences limited.