May 27, 2011
I'll be back to more regular blogging next week -- and there will be lots to catch up on. For now, I want to send my warmest congratulations to the Class of 2011. Off to sit in ceremonies all day...
May 24, 2011
UK Parliament releases report on Kraft acquisition of Cadbury
The FT has a nice review of Kraft's acquisition of Cadbury one year on. The initial results of the acquisition appear to be mixed. On the one hand,
Speaking to the Financial Times before Monday’s statement from the committee, [Kraft CEO Rosenfeld] said: “We have clearly shown ourselves to be good stewards of the brands, and yet the continued assault has been somewhat surprising.
“I think we’ve done everything possible to address concerns, to respond to issues, and the focus remains on making sure that this integration is successful."
Defectors from Cadbury and politicians beg to differ. They say the speed of the integration, allied to the fact that the hostile nature of the bid precluded due diligence, has made the process more fraught. Ms Rosenfeld’s perceived disdain, for workers as well as parliament, has added to the rancour.
In the wake of the acquisition and what were understood to be broken promises related to the status of the Cadbry plant in Bournville, the UK Takeover Panel revisited its rules and the UK Parliament tasked a Select Committee to undertake an investigation. The Committee's report, Is Kraft Working for Cadbury?, was released earlier this month. The report - though critical of Kraft in many respects - was guardedly optimistic:
Our overall conclusion, therefore, is that, while there remain some significant concerns about Kraft takeover of Cadbury, a number of positive signs may be beginning to emerge. Those positive messages would have been considerably more convincing if conveyed directly to bodies such as ourselves from the top of the organisation. As for the future, Kraft's witnesses asked us to judge Kraft on its deeds. We shall.
For the timebeing, that seems to be it from the Parliament and its investigation.
DOJ Sues H&R Block
The DOJ's Antitrust Division filed a suit to block H&R Block's proposed acquisition of TaxAct yesterday. H&R Block is in the process of learning a lesson (likely expensive) about what not to say in the run up to a deal. For example, internal documents from H&R Block noted that the primary benefit of the acquisition would be “elimination of competitor.” That's never good a good document to hand over when the antitrust authorities come knocking. Another goodie - internal documents note that “acquir[ing] TaxACT and [will] eliminate the brand to regain control of industry pricing and further price erosion.”
Here's the DOJ's complaint.