Solving Acquisition Challenges for Group Danone and Kraft
Case Study of a Multi-National Consumer Food Products Company
The Challenge
In support of its $7.8 billion acquisition of Groupe Danone’s global biscuit business, Kraft Foods required a valuation for financial and tax reporting purposes. Material fixed assets and major manufacturing plants were located throughout Europe, Africa, China, and Asia. Groupe Danone’s biscuit business (GBB) included approximately 60 biscuit brands, such as LU, Tuc and Prince, and operations and assets in more than 20 countries, including 32 manufacturing facilities.
The Solution
In meeting Kraft’s valuation needs, VRC submitted a proposal incorporating the expertise and local presence of VRC and various VRG affiliates. Kraft held introductory meetings in Paris. These meetings introduced VRC/VRG professionals to Kraft’s corporate accounting/tax group and the various regional GBB controllers. As part of these meetings, VRC detailed the scope of work, the expectations for support and information from each region, and the schedule – including which plants and other locations were to be inspected on-site. The requirements of each region were also discussed, including how valuations were to be developed for, and by, legal entity.
Overall project management was maintained in the United States due to Kraft’s compliance needs with U.S. GAAP, the IRS and the SEC. Individual areas were also managed in the United States by the various asset category leaders.
