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Strategic Management: Concepts and Cases: Competitiveness and Globalization 13th Edition by Michael Hitt , R. Duane Ireland , Robert Hoskisson
Edition 13ISBN: 9780357033838Strategic Management: Concepts and Cases: Competitiveness and Globalization 13th Edition by Michael Hitt , R. Duane Ireland , Robert Hoskisson
Edition 13ISBN: 9780357033838 Exercise 2
Mini Case
Cementing a Merger of Equals between Lafarge and Holcim Has Been Difficult
Note: each chapter Mini-Case is prepared as an auto-graded Guided Case Analysis activity in MindTap™. More information below.
Lafarge is a successful French-based global company specializing in cement, construction aggregates, and concrete. Holcim is a materials company in Switzerland. They orchestrated a merger of equals in 2014, believing that they could achieve $1.5 billion in annual cost savings as a result of integrating their operations. After passing regulatory hurdles in the countries where they do business, the deal almost fell through concerning the valuations of the companies. Two years after the merger, LafargeHolcim had not realized the economies of scale it expected, and the firm's performance had fallen so far below expectations that a new CEO was brought in. Jan Jenisch quickly announced a restructuring plan, including writing off $4 billion in assets, which caused the company's stock to drop by 7 percent.
-Given that there have been performance difficulties of this "merger of equals," which of the "Problems in Achieving Acquisition Success" do you believe have most likely affected this deal?
Cementing a Merger of Equals between Lafarge and Holcim Has Been Difficult
Note: each chapter Mini-Case is prepared as an auto-graded Guided Case Analysis activity in MindTap™. More information below.
Lafarge is a successful French-based global company specializing in cement, construction aggregates, and concrete. Holcim is a materials company in Switzerland. They orchestrated a merger of equals in 2014, believing that they could achieve $1.5 billion in annual cost savings as a result of integrating their operations. After passing regulatory hurdles in the countries where they do business, the deal almost fell through concerning the valuations of the companies. Two years after the merger, LafargeHolcim had not realized the economies of scale it expected, and the firm's performance had fallen so far below expectations that a new CEO was brought in. Jan Jenisch quickly announced a restructuring plan, including writing off $4 billion in assets, which caused the company's stock to drop by 7 percent.
-Given that there have been performance difficulties of this "merger of equals," which of the "Problems in Achieving Acquisition Success" do you believe have most likely affected this deal?
Explanation
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Strategic Management: Concepts and Cases: Competitiveness and Globalization 13th Edition by Michael Hitt , R. Duane Ireland , Robert Hoskisson
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