H.J. Heinz M&A Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

H.J. Heinz M&A Case Solution

Interests and strategies

Describe the activities of Nelson Peltz and the role he played in laying thegroundwork for the acquisition by Berkshire Hathaway and 3G.

In the economic boom, where majority of the companies were increasing their performances and profitability, Heinz was struggling to achieve sustainability. The company is facing immense pressure from its investors especially Nelson Peltz, an activist investor who has 5.4% percent interest in the voting stake of the company through investment fund. In this situation, he assumes himself as an outspoken investor that frequently raises questions over the operations and management of business. He asked the board to make certain decisions in order to improve the company’s operations. Nelson recognizes that the inefficiency lies in the management structure and he asked the company to give him charge by giving seats in the board. He wants an oversight over the management’s activities. Nelson’s efforts made the company take some major decisions to improve its performance.

h.j. heinz m&a case solution

The company has made massive restructuring and laid off 2700 employees. To decrease its cost, the company decreased the number of factories it holds by 15. Moreover, the company buys back its shares that allow it to have more power over the entity. During such restructuring, Nelson Peltz secure two seats on the board. With his presence in the board, he gains valuable power to influence the decision of the board. With the support of few other board members, he might have greater decision power over the matters concerning the board and the company. All these changes made the company start its new journey towards potential growth and success and make it a favorable acquisition option.

Discuss the positions of various stakeholders including Heinz shareholders, management, employees and citizens of Pittsburgh.

Various stakeholders will be affected by this acquisition. The shareholders or investors of the company are the primary stakeholders. They have invested in the company to earn return. In this situation, where other companies are offering greater return due to their greater performance as compared to Heinz, shareholders are concerned with the company’s future and the value of their investment. They feel their stake risky. Therefore, the acquisition seems acceptable to them. The acquisition offers more than competitive value for their shares; therefore, the shareholders will be willing to accept such offer.

The management of the company has gone through major restructuring; they want to work with the company to avoid such acquisition. They might have plans and goals to drive the company to its glory. Senior management might have the vision to run the company and make its performance better. This acquisition, therefore, might be unfavorable and unacceptable for many of the senior managers, middle managers, and other management staff. However, they have no choice, since the ultimate decision remains with the shareholders of the company. It will be beneficial for the company and the acquirers to have the same management and let them work with the combined faculty of the combined firm.

For employees, the decision to sell the company is the worst situation. Most of them might lose their jobs. Employees are dependent on the company and they are at the initial start of their career. Thus, they feel discouragement and frustration. However, since the economy is in boom, there might be vacancies available for some of them. Some employee redundancy program should also be included in the acquisition deal.

The citizens of Pittsburgh, might regard this acquisition as a favorable one, the consolidated company will provide better products and quality to them. The citizens, as provided in the case, don’t want the company to relocate its operations outside the state. Citizens might influence the company and the deal through pressure groups and external campaign.......................