Perrier-Nestle

PERRIER, NESTLÉ, AND THE AGNELLIS
Gulleroglu|Mbewe|Shkreta|Secilmis
24 April 2013

Summary
 Perrier S.A, the world’s largest mineral water company is facing financial and reputational difficulties due to a recent scandal where benzene was found in its products
 The prominent Italian family The Agnelli’s, who own Fiat SpA, see the opportunity to take over Perrier
 They are bidding indirectly through two French companies, Exor who has 35.5% of controlling votes in Perrier and Saint Louis who owns
13.8% of the Perrier stock in the form of Treasury stock
 The Swiss-based food giant Nestle and its French ally BSN (future DANONE) contest the bid and are interested in acquiring Perrier as well
 Nestlé's advancement for Perrier was simultaneous/coordinated with BSN bid for Exor
 Nestlé's chances, at first sight, seem limited. The Agnelli’s nearly control 50% of Perrier
 Furthermore Nestle filed two lawsuits in France
 1- It asks the authorities to look at Exor’s control stake because they have breached the law
 2- It asks for the nullification of the share sales to Saint Louis
 The European competition authorities will have a close look at the merger because Nestle/Perrier would control 56% of the mineral water market.  Combined with BSN the market control shoots-up at 82%

Blueprint of events
 1989 - Exor increase control stake in Perrier to 35.5%. Prior to the increase it owned 23.7%
 19/01/1990 – Benzene scandal
 Share price drops to FF 1200 from FF 2000
 Profits from Perrier mineral water business decrease by 21%
 06/1990 – Jacques Vincent, Chairman of Perrier, replaces Gustave Leven as Perrier Chairman
 11/1991 – IFINT launches a friendly bid of FF 1320 for 2/3 of Exor with the backing of the Mentzelopoulos family
 03/01/1992 - Saint Louis acquires 13.8% of Perrier
 13/01/1992 – Nestle announces that it is interested to bid for Perrier
 20/01/1992 – Nestle and Banque Indosuez make a full bid for Perrier at FF 1475
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