Merger, Acquisition, and International Strategies

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MERGER, ACQUISITION, AND INTERNATIONAL STRATEGIES
Mergers and acquisitions are critical in corporate restructuring. The idea behind mergers and acquisitions is that two businesses together are much more valuable than the same businesses when they are separate entities. Mergers occur when two companies join to form a single company with a new name, while in acquisitions one firm acquires another one and the latter ceases to exist (Alam, Khan and Zafar, 2014). It is common in an acquisition for a larger company to purchase a smaller firm. There are a number of reasons for mergers and acquisitions. Some do it to pave the way for entering new markets and gain a substantial advantage over their competitors. Others want to survive and cut down financial burden in order to increase shareholder value. Whatever the reasons behind the merger and acquisition, it can lead to success or failure. PepsiCo Inc. is a public company which manufactures food and beverages, and it is as a result of a merger of other smaller companies. Ingles Markets, Inc. is a local American supermarket operating mainly in the Southeastern region of the U.S. the company does not have a history of mergers and acquisitions.
PepsiCo Acquisition of Quaker Oats Inc.
PepsiCo Inc. is a global food and beverage business. The company manufactures, markets and distributes a variety of drinks, foods, and snacks in more than 200 countries (Tabassum et al. 2014). The company was formed by the merger of Frito-Lay Inc. and Pepsi-Cola companies. It has expanded ever since and now has some of the leading brands like Pepsi, Tropicana, Frito-Lay and Schweppes. Currently, PepsiCo is ranked the top distributor of food stuff and beverages in North America. This has allowed the business to increase revenues to $ 43.3 billion dollars.
The achievements of PepsiCo are due to mergers and acquisitions. One of the greatest success of the company was the acquisition of Quaker Oats in 2001. PepsiCo wanted to counter competition from the Coca-Cola Company. For a long time, Coca-Cola was the largest distributor of beverages in the world. PepsiCo wanted to gain a competitive edge in an industry dominated by the rival company for a long time. PepsiCo $13.6 billion purchase of Quaker was successful and made its business more efficient in operations like sales and media buying. (Murphy, 2002). The acquisition gave PepsiCo control of the coveted Gatorade sports brand by Quaker. In 2005, PepsiCo sales surpassed those of Coca-Cola Company for the first time indicating the success of the acquisition. The various acquisitions and mergers have allowed PepsiCo to come up with a range of variety from carbonated drinks to beverages. In 2009, Coca-Cola was the largest distributor of carbonated drinks in the United States, but PepsiCo led in the distribution of beverages in the region. PepsiCo’s decision to produce a variety of products was critical instead of competing with Coca-Cola in carbonated drinks. PepsiCo acquired a very attractive company with competent managers. Quaker operated in almost the same industry and was successful. Hence it transferred the skills and activities to give a competitive advantage to PepsiCo.
Ingles Markets Inc. mer...