This case is all about the takeover bid of Zandu Pharmaceutical Works, a small Indian traditional medicine maker based at Jamnagar, (Gujarat, India). It encapsulates the protracted multi-level negotiations among its two promoter families - the Parikhs and the Vaidyas - with Kolkata, India based Emami group that thought to take over the business in 2008. Both families had created ZanduPharma in 1910. The Vaidyas brought technical knowhow to the company and came from a lineage of Ayurveda practitioners.
Zandu Pharmaceutical Works The Takeover Bid (A) Case Solution
The Parikhs belonged to a conventional trading community and brought their business acumen to the company. Complimenting each other, both families handled the business for about hundred years. However, with passing of time, the later generations became firmly entrenched within the firm's operations and of the Parikhs got technical knowledge. On the flip side, the Vaidyas neglected to efficiently pass on the technical expertise to their later generations. Thus their relevance in the eyes of the Parikhs went down and Vaidya descendants were viewed as bungling. The Vaidyas felt dismissed and marginalized; the Parikhs repeatedly denied their demand for a director's place on the organization’s board.
Pushed into a corner, the Vaidyas sold their position to Kolkata based beautycare and health care business - Emami in Zandu. The Parikhs saw this as an aggressive step and tried to encounter Emmi’s bid for the control of Zandu. The choice dilemma that Parikhs face in the case is - to fight with the takeover battle or whether to sell their position to Emami. The case narrates the actions taken by parties involved as well as the conditions. The case deals with various managerial problems like leadership, communication, acquisition strategy and psychological issues faced by promoter families. The case functions as an effective tool for students to learn and apply communication, leadership, strategic and negotiation skills in complicated acquisition scenarios, like those in family controlled businesses.
PUBLICATION DATE: November 01, 2014 PRODUCT #: ISB045-PDF-ENG
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