Gm And p

General mill about approached Diageo with a proposition to acquire its Pillsbury brand. two companies agreed to the terms on July 16, 2000 and made the announcement to the familiar public on July 17, 2000. The achievement was to take the form of a stock for stock transaction, leaving Diageo with 33% ownership in General Mills. General Mills is tasked with justifying this optical fusion to shareholders in hopes of gaining their brotherly votes. This paper will seek to make a analogy in the terminal value of General Mills with and without the science in station to convince shareholders of its viability.
As with any merger or acquisition, General Mills expects to realize certain synergies from this acquisition with Pillsbury. General Mills is expecting that the combined firm will regress more revenues and complement each other. General Mills hope to see increased market gains from this acquisition placing them fifth among competitors. This provides the intelligible advantage of greater operating revenues through improved merchandise with the new, complimentary, Pillsbury brand. General Mills will now be able to have a balanced product mix in line with the companys core competencies and capabilities.
One of the study benefits of this acquisition is the cost reductions gained in pretax savings for the first 3 years of operation.



As you will see later on, this is a powerful incentive in convincing shareholders to accept this acquisition. constitute savings are also realized through working(a) efficiency and supply chain management improvements.
The Deal
The terms of the pull off require General Mills to issue an additional 141 zillion shares to Diageo, resulting in them having a 33% ownership in the company. In an effort to maintain its investment grade rating, Diageo would receive $5 billion in debt from Pillsbury, a liability that General Mills would assume with ownership. General Mills establishes a claw-back clause stipulating that Diageo would generate the, $642 million if share...If you want to get a full essay, order it on our website: Orderessay



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