General Mill Essay
GENERAL MILLS' ACQUISITION OF PILLSBURY FROM DIAGEO PLC
General Mills is a major manufacturer and marketer of consumer foods in partnership with Pepsi Co. and Nestle. General Mills’ revenue is about 7.5 dollars with a market capitalization numbering to about 11 billion dollars. Its products are cereals, snacks, yogurt and many more and with this, they have to decide about an acquisition of another business which complements their products for them to be able to create more shares of stocks for the personal growth of the company. The company which they want to acquire is Pillsbury which is owned by Diageo PLC. Diageo PLC is considered as one of the leading consumer goods companies in the world. Owned by Diageo, Pillsbury operates as …show more content…
General Mills will achieve growth because sales that will be made by Pillsbury will now be added to the sales made by General Mills and that goes with an increase in revenue for General Mills. This result will then benefit GM’s share-holders. 2. The two companies’ products are related and thus there would be easier management and operation since they could combine materials and resources and be able to choose which are the better suppliers bases on what the two companies currently have. Upon acquisition, they joint companies could now remove and retain what is better for them to have for better production. In relation to this, they would then be able to save costs maybe from production or others like taxes. 3. Merger of brand names could increase the value of the company with regards to their popularity. 4. According to Porter, there is rivalry in industries and as a Hotel and Restaurant Management graduate, I could say that the competition within the food industry is very intense because of low barriers to entry. So, the joining of two big companies is essential for them to be able to create stronger barriers to diminish competitors and therefore earn more than usual.
EXHIBIT 3 Price of stocks on transaction date, July 14, 2000 is
General Mills is a major manufacturer and marketer of consumer foods in partnership with Pepsi Co. and Nestle. General Mills’ revenue is about 7.5 dollars with a market capitalization numbering to about 11 billion dollars. Its products are cereals, snacks, yogurt and many more and with this, they have to decide about an acquisition of another business which complements their products for them to be able to create more shares of stocks for the personal growth of the company. The company which they want to acquire is Pillsbury which is owned by Diageo PLC. Diageo PLC is considered as one of the leading consumer goods companies in the world. Owned by Diageo, Pillsbury operates as …show more content…
General Mills will achieve growth because sales that will be made by Pillsbury will now be added to the sales made by General Mills and that goes with an increase in revenue for General Mills. This result will then benefit GM’s share-holders. 2. The two companies’ products are related and thus there would be easier management and operation since they could combine materials and resources and be able to choose which are the better suppliers bases on what the two companies currently have. Upon acquisition, they joint companies could now remove and retain what is better for them to have for better production. In relation to this, they would then be able to save costs maybe from production or others like taxes. 3. Merger of brand names could increase the value of the company with regards to their popularity. 4. According to Porter, there is rivalry in industries and as a Hotel and Restaurant Management graduate, I could say that the competition within the food industry is very intense because of low barriers to entry. So, the joining of two big companies is essential for them to be able to create stronger barriers to diminish competitors and therefore earn more than usual.
EXHIBIT 3 Price of stocks on transaction date, July 14, 2000 is