...Case Study 3 “Diageo, Plc.” Introduction บริษัท Diageo ถูกก่อตั้งขึ้นในปี 1997 จากการควบรวมกิจการระหว่างบริษัท Grand Metropolitan plc. กับบริษัท Guinness จนกลายเป็นบริษัทอาหารและเครื่องดื่มที่ใหญ่เป็นอันดับ 7 ของโลก หลังจากการควบรวมกันเป็นบริษัท Diageo ต้องการจะเน้นไปที่เครื่องดื่มแอลกอฮอล์เพียงอย่างเดียว จึงตัดสินใจที่จะขายธุรกิจอาหารไป ได้แก่ Pillsbury โดยขายให้กับ General Mills และต้องการจะออกจากธุรกิจ fast food โดยการออกขายหุ้น IPO ของ Burger King นอกจากนี้ บริษัท Diageo ยังเข้าซื้อกิจการประเภทแอลกอฮอล์ ได้แก่ Seagrams ทำให้บริษัทขยายใหญ่ขึ้นและมีความแข็งแกร่งทางด้านธุรกิจแอลกอฮอล์ ก่อนที่จะมีการควบรวมกิจการนั้น Guinness กับ Grand Metropolitan มี rating อยู่ที่ AA และ A ตามลำดับ แต่พอหลังการควบรวมกิจการเป็นบริษัท Diageo ทำให้มีถูกลด rating เหลือเพียง BBB โดยRating Agencies ได้แก่ Standard and Poor’s และ Moody’s เนื่องจากเกิดความไม่แน่นอนของนโยบายทางการเงินของบริษัท บริษัท Diageo จึงต้องควบคุม Capital Structure ให้มีประสิทธิภาพ โดยการรักษาระดับของ interest cover ratio ไว้ 5-8 เท่า และคงระดับของ EBITDA/Total Debt ให้อยู่ที่ 30% - 35%ถ้าบริษัท Diageo ต้องการรักษา rating ให้อยู่ที่ระดับ A+ นอกจากนี้บริษัทจะต้องใช้นโยบาย Trade-off Theory ซึ่งเป็นการเลือกระหว่างความเสี่ยงและผลตอบแทน กล่าวคือบริษัท Diageo ต้องเลือกระหว่างต้นทุนความล้มเหลวทางเงิน (Financial Distress)และผลประโยชน์ทางภาษี (Tax Shield) โดยสามารถคำนวณจากผลประโยชน์ทางภาษีในแต่ละปีและการประเมินความน่าจะเป็นที่จะเกิดความล้มเหลวทางการเงิน บริษัทมีการใช้ Monte Carlo Analysis ซึ่งใช้การวิเคราะห์แก้ปัญหาที่ยากหรือไม่สามารถแก้ปัญหาได้...
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...Case: Diageo Ple Analysis Fact Pattern This is a strategic options case regarding Diageo PLC. Diageo is a conglomerate focusing on premium alcoholic beverages. Diageo is a United Kingdom based consumer product company. Diageo was formed in November 1997 from the merger of Grand Metropolitan Plc. and Guinness Plc., two of the world’s leading consumer product companies. The company began with the mission to be the strongest premium alcoholic beverage producer worldwide. Diageo Plc. is the seventh largest food and drink company in the world with a market capitalization of nearly ￡24 billion and annual sales of over ￡13 billion to more than 140 countries. Although the largest and the fastest growing business was the Spirits and wine business, with sales growth of 8% for the year and 15% operating margins and growth in total operating profits of 15%. And the second largest division was Guinness Brewing, which produced and sold beer to markets around the world. And the Diageo was in the process of integrating the two business, which may result in cost reductions of ￡130 million annually. To that end, they have acquired a majority of premium brands in the spirits industry and a large portfolio of premium wines, while at the same time divesting itself of those companies not in line with its new goals. Diageo’s two remaining business were in packaged and fast foods. As a matter of fact, the stock price of the company was far low from the average stock price after 7/1/99. In 2000...
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...differently, in order that they can survive the recession and avoid going down the costly route of redundancies.' Shorter working weeks Companies offering shorter working weeks include KPMG who told staff in January that they could save their jobs by volunteering to work a four-day week. At the time KPMG's associate partner David Knight warned that: 'A redundancy programme can lead to problems when the upturn eventually arrives.' And 2,500 JCB workers of a work force of over 8,000 agreed to work a four-day week for 13 weeks to help the manufacturing firm. Sabbaticals The 11,000 workforce of KPMG was also offered a sabbatical, which would require them to take between one and three months off on 30 per cent pay. Gleneagles, owned by Diageo Plc, sent letters to 700 employees in January asking them to...
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...Diageo Plc Case: Diageo Plc Analysis Fact Pattern This is a strategic options case regarding Diageo PLC. Diageo is a conglomerate focusing on premium alcoholic beverages. Diageo is a United Kingdom based consumer product company. Diageo was formed in November 1997 from the merger of Grand Metropolitan Plc. and Guinness Plc., two of the world’s leading consumer product companies. The company began with the mission to be the strongest premium alcoholic beverage producer worldwide. Diageo Plc. is the seventh largest food and drink company in the world with a market capitalization of nearly ￡24 billion and annual sales of over ￡13 billion to more than 140 countries. Although the largest and the fastest growing business was the Spirits and wine business, with sales growth of 8% for the year and 15% operating margins and growth in total operating profits of 15%. And the second largest division was Guinness Brewing, which produced and sold beer to markets around the world. And the Diageo was in the process of integrating the two business, which may result in cost reductions of ￡130 million annually. To that end, they have acquired a majority of premium brands in the spirits industry and a large portfolio of premium wines, while at the same time divesting itself of those companies not in line with its new goals. Diageo’s two remaining business were in packaged and fast foods. As a matter of fact, the stock price of the company was far low from the average stock price after 7/1/99...
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...High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/439afd42-1b96-11e3-b678-00144feab7de.html#ixzz3aguLbOXp When hundreds of thousands of protesters chanted Vem pra rua, vem! (“Come to the street, come!”) across Brazilian cities in June, executives at Fiat probably could not believe their ears. The slogan had been the centrepiece of the Italian carmaker’s advertising campaign, launched only the month before, part of its most expensive marketing project in the Latin American country this year. More ON THIS STORY Recognition of Latin America increases A love affair with luxury Luxury goods: Designer labels follow rise in wealth Cementos Argos bets on US Colombia: Loyalty is biggest barrier to new entrants ON THIS TOPIC Brazil politics broken, says former leader Hopes & Fears: Cláudia Vassallo Real buffeted by US rates speculation EM Squared Brazil slowdown hits ‘fallen angels’ IN LATIN AMERICAN BRANDS Mexico to unveil revamped global image Start-ups find growth in young Brazil Nike scores from the sidelines with ambush marketing Peru’s ‘improbable’ drink wins out over Coke Sign up now firstFT FirstFT is our new essential daily email briefing of the best stories from across the web While the phrase itself has been used during political...
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...I. Executive Summary Diageo, one of the world’s leading consumer goods companies, was formed from the merger of GrandMet and Guinness. In 2000, the company announced its intention to sell its packaged food subsidiary, Pillsbury, and 20% of its Burger King subsidiary. Because of the restructuring opportunity, the company wanted to rethink its financing mix. In this case, the tradeoff between the costs and benefits of different leverage policies will be discussed. A simulation model was created by Diageo’s director of Finance and Capital Markets, Ian Simpson, and Adrian Williams, the firm’s Treasury Research Manager, to understand the tax benefits of higher gearing and the cost of financial distress. In this report, I will discuss the historical financial policies in Diageo. The actions of selling Pillsbury and spinoff of Burger King will be valued. And the tradeoff theory and Simpson and Williams’ simulation model will be studied and evaluated as well. Finally our conclusion is to choose interest coverage around 5. II. The Case Decision What recommendation would be made for Diageo’s future capital structure? Is Simpson and Williams’ simulation model reliable? III.Facts 1. Diageo was formed from the merger of Guinness and GrandMet. It was the seventh largest food and drink company in the world. 2. The firm was organized along four business segments: Spirits and wine business, Guinness Brewing, Packaged and fast food. 3. Prior to the merger, both of the two companies...
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...CASO PRÁCTICO: DIVIDEND POLICY AT LINEAR TECHNOLOGY Conceptualización del problema En el 1981 Linear Technology fue fundada por Rober Sawson en California, esta compañía se dedica a diseñar, fabricar y comercializar circuitos integrados. Por capitalización de mercado Linear ocupa el séptimo lugar dentro de su segmento. En 1986 Linear empezó a cotizar en NASDAQ y desde ahí ha dividido sus acciones cuatro veces. Dentro de los datos financieros del año fiscal se destaca el crecimiento sostenido que presenta Linear entre 1992 y 2001, siendo este ultimo año donde se alcanza un nivel muy alto en ventas logrando así unas cifras imposibles de repetir. Dentro de su política de dividendos, Linear paga dividendos y hace la recompra de acciones. La primera la utiliza cada trimestre desde el 13 de octubre de 1992 cuando anuncio el pago de $0,05 por acción. Para el año 2002 la gerencia y la junta directiva de Linear determinaron realizar un aumento en los dividendos, cosa que busco señalar al mercado que Linear era una compañía rentable y que además de esto contaba con un flujo de caja positivo. Todo esto a razón de que la ventas para ese año bajaron un poco mas del 50% en comparación con el año inmediatamente anterior. Reseña del histórico de los dividendos Análisis de los requerimientos de recursos y su disponibilidad en la firma Linear gracias a su estructura de costos variables pudo afontar la caída de ventas que tuvo VER CUADRO Costos y beneficios de la retención...
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...is a Mexican alcoholic beverage company that is owned by the famous Beckmann family (Lorenzetti, 2014). The family’s global reputation is secured on the important role it has played over the years in popularizing the commercialization of tequila production. Jose Cuervo’s flagship product is its eponymous tequila brand, Jose Cuervo, which is by far the best-selling and most popular brand of tequila in the world (Evans, 2014). The company mostly collaborates with other alcoholic beverage corporations such as Diageo Plc and Proximo Spirits...
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...Introducción y antecedentes Diageo se formó en 1997 mediante la fusión de dos empresas de productos de consumo Grand Metropolitan plc plc y Guinness en la estrategia de reducción de costes a través de sinergias de comercialización, reduciendo los gastos generales y aumentar la producción y la compra de la eficiencia. La nueva fusión quería concentrarse exclusivamente en el negocio de bebidas alcohólicas, por lo que vendió sus alimentos envasados (Pillsbury) y comida rápida (Burger King) empresas. Si bien el mandato para la gestión de valor provino de los niveles más altos de Diageo, el equipo de tesorería se le dio la tarea de establecer el costo del capital para cada una de las diferentes áreas de la empresa opera. El equipo tuvo que crear un modelo de simulación que se deben considerar nuevos enfoques financieros, de tesorería para centrarse en, ¿qué huellas de la empresa de riesgo será, cómo calcular el costo del capital y, finalmente, cómo la estructura óptima de capital. ¿Cómo ha logrado Diageo su estructura de capital? Ambos Grand Metropolitan y Guinness tenía una deuda poco antes de la fusión, lo que les permitió beneficiarse de calificaciones relativamente alta sobre sus bonos (AA y A, respectivamente). Inmediatamente después de la fusión, la gestión de Diageo anunció que mantendría políticas similares a las adoptadas por las dos compañías anteriores. Esta decisión tomó la forma de una promesa implícita de no entrar en un nivel de deuda que llevaría a una reducción...
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...In 1869, after working in his uncle's hardware supply company in Minneapolis, Charles A. Pillsbury, 27 years old, bought one-third of a local flour mill for $10,000 and began what would become the Pillsbury Company. Pillsbury and their competition, the Washburn Crosby Company, formed the Minneapolis Millers Association that same year. Pillsbury's improved in milling machinery included the early incorporation of modern equipment for milling the very hard local wheat. These improvements and the purchase of two additional mills allowed him to produce 2,000 barrels of flour a day by 1872. That year, he reorganized the company as C.A. Pillsbury and Company, making his father and uncle partners. During the 1880s, Pillsbury added six more mills, including...
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...the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/0/6c92feaa-fc0f-11e0-b1d8-00144feab49a.html#ixzz2Cu5c99bj Case study: Diageo By Abby Ghobadian The story: After a series of mergers, demergers and acquisitions, the management of Diageo, the conglomerate formed by the 1997 merger of Guinness and Grand Met, made a strategic decision to focus on premium alcohol drinks. Diageo was in charge of an expanding and wide-ranging collection of brands, some of which had broad appeal across many countries while others had more regional appeal, sometimes limited to just a few markets. The challenge: After both organic growth and acquisitions, three key dilemmas emerged by 2002. First, how to manage brands with significantly different appeal, such as Guinness, a brand with strong Irish roots but huge global appeal, or Buchanan’s, the leading Scotch whisky in Latin America. Second, how to rejuvenate tired brands and third, how to improve the market share of the most successful brands, such as Captain Morgan, J & B, Smirnoff and Johnnie Walker. The initial strategy: To help managers maintain focus and allocate resources, Diageo developed three brand classifications: global priority, local priority and category. The global priority brands were the big sellers that were popular across a number of important markets and received the lion’s share of promotional resources...
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...Subject name –strategic business management Topic name - The adidas company analysis Submitted by- Sohail yousaf Registration number-(MAF 051-23-074) Submitted to – Sir ahmad shahzad The MS Model The MS model is a method through which we identify human and material resources and how they are applied in particular industry or sector. Following is the detail provided of the adidas company how they applied MS model. Machinery As a part to initiate and implement better technology, such as computer stitching and high cutting frequency and automated production line across factories and to provide technical training to the staff across the factory. Make up Being a large organization the company has also made the policies to maintain its cutler, by keeping high value to its employees, and management. As we know that being a large organization the company has also protected its good will and patents therefore the company has also developed anti-counterfeiting programs. Management & Information To become a leading organization management is the the back bone of the organization. The company has hired most skilled and computable management in order to get the best and unique product. In this process a lot of work Is done at R&D department. Markets Being a large organization it is necessary to maintain...
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...With these developments, it is obvious that conflicts between parties of different nationalities occur and liability to tax on income of foreigners especially among those engaging in trading venture. Whilst the laws affecting domicile and residence may be sufficiently settled, it is paramount for courts to pursue a detailed analysis to ascertain specific preliminary issues so as to avoid controversial rulings. Courts often handle numerous financial cases that involve what can be best described as foreign or international elements. In such cases, court must decide whether it has the jurisdiction under the Family Law Act 1975 to make a decision on such cases. In the event that it is determined that the court is invested with the jurisdiction to determine the case, the court has to consider whether there is a system of law in foreign country that also has the jurisdiction to handle the case. As it was addressed in the case Attorney General of New Zealand v Ortiz [1984] AC 1, these benefits and costs to either party if the case resolution is made in foreign country as compared with the apparent country should also be a subject of concern. [1] Legal systems in most countries around the world adopt community property regime, which takes effect at the inception of marriage or at the time of divorce. For instance, California and Massachusetts in the United States have adopted community property regimes that support equal division of assets upon divorce. However, this provision...
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...Adapted from Bernhardt & Kinnear (1988). Cases in marketing management, pp. 6-16. Plano, TX: Business Publications, Inc. Pay careful attention to the following points. They are often used by instructors to evaluate either a written or oral analysis. 1. Be complete. Each area of the situation analysis must be discussed, problems and opportunities identified, alternative presented and evaluated using the situation analysis and relevant financial analysis, and a decision must be made. An analysis that omits part of the situation analysis or only recognizes one alternative is not a good analysis. Second, each area must be covered in-depth and within insight. 2. Avoid rehashing case facts. Every case has a lot of factual information. A good analysis uses facts that are relevant to the situation at hand to make summary points of analysis. A poor analysis just restates or rehashes theses facts without making relevant summary comments. 3. Make reasonable assumptions. Every case is incomplete in terms of some piece of information that you would like to have. A good case analysis must make realistic assumptions to fill in the gaps of information in the case. For example, the case may not describe the purchase decision process for the product of interest. A poor analysis would either omit mentioning this or just state that no information is available. A good analysis would attempt to present this purchase decision process by classifying the product and drawing upon real life...
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...are given. It is understandable then that we should seek out more opportunities to apply our skills and make more positive impacts within our jurisdictions. It is this general attitude that led us to get involved in investigating cold cases. How We Got Started Mark had, for several years, been consulting with our Coroner’s Division as a forensic anthropologist. During this time he came to learn that there were numerous coroners’ cases in which the identity of the decedent was unknown. These cases were kept in three-ring binders on a shelf in the Sergeant’s office. Over the years, in the course of this forensic work, we would discuss these cases and the progress that was being made on them. The conversation usually ran along the lines of us asking “any luck with that 1980 homicide victim?” and the sergeant answering “well, we’ve gotten so many new cases that I haven’t been able to even look at it yet.” This went on for a few years and through two different sergeants. One day we, as a crime analysis unit, were brainstorming about how we could broaden our “client base”, as it were. We had been successful in integrating ourselves into our Investigations Bureau and had been involved in numerous major cases. And, of course, we had always been active in producing tactical and strategic analyses for our patrol personnel. But we knew that we could be doing more, particularly given the size and responsibilities of our agency. It was during...
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