The Nestlé takeover of rowntree: A case study

Dana Hyde, James Ellert and J Peter Killing

European Management Journal, 1991, vol. 9, issue 1, 1-17

Abstract: Against a background of weak share price behaviour and weak (although improving) operating performance, Rowntree plc found itself subject to a Dawn Raid on its shares early in 1988 by Jacobs Suchard, the Swiss confectionery company. This seemed a good moment to turn previous collaboration discussions with Nestlé into a full-blown White Knight takeover. However, the discussions were very friendly: complementarity in products was clearly in evidence, and Nestlé saw much synergy through R and D, products, administration and sales force, leading to economies of scale. It is a Case Study of an eminently sensible integration of two companies in a competitive business. The negotiations were conducted in a mature way; there are echoes of style here of later takeovers like the end-1990 acquisition of Cruzcampo, the large Spanish brewery, by Guinness.

Date: 1991
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