Philip Morris, Incorporated: Seven Up Acquisition (a)
31 Pages Posted: 21 Oct 2008
Abstract
Management is faced with the evaluation and pricing of Seven-Up. The case describes Philip Morris since its acquisition of Miller Beer and Seven-Up as an acquisition candidate. (The B case is UVA-F-0479, and the C case is UVA-F-0480.)
Excerpt
UVA-F-0478
PHILIP MORRIS, INCORPORATED:
SEVEN UP ACQUISITION (A)
Introduction
The decision had been made. Philip Morris, Inc., (PM) was going to make a takeover bid for the Seven Up Company. The difficulties and intricacies of that decision paled, however, in the face of the next one: At what price should PM management make its tender offer?
It was the latter half of April 1978, and in the face of an increasingly active merger/acquisition market, PM management recognized the need for the utmost speed and secrecy in developing its bidding strategy.
. . .
Keywords: acquisitions, cash flow, mergers, model evaluation, strategy formulation, valuation
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