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  • December 2017
  • Supplement
  • HBS Case Collection

Bega Cheese: Bidding to Bring Vegemite Back Home

By: Benjamin C. Esty and Lauren G. Pickle
  • Format:Electronic
  • | Language:English
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Abstract

In January 2017, the leadership team of Bega Cheese—the Australian dairy company—was considering a bid for Mondelēz International’s Australia and New Zealand (ANZ) grocery business which included several leading consumer brands (Vegemite—the iconic Australian spread, ZoOsh, and Bonox as well as licenses to produce various Kraft products). The team must decide whether to bid for the division and, if so, how much to offer and how to finance the acquisition. Making these decisions was difficult because this would be Bega’s largest acquisition ever (the target’s sales were 25% of Bega’s total sales) and it was outside of Bega’s core dairy business. The leadership team has to decide whether a shift from the current B2B business model (manufacturing and processing dairy products) to more of a B2C business model (a producer of branded consumer goods) made sense strategically.

Keywords

Mergers & Acquisitions; Value Drivers; Discounted Cash Flow (DCF); Dairy Industry; Corporate Scope; Diversification; Consumer Goods; Iconic Brands; Australia; Corporate Finance; Bidding Strategy; Cross Border; Mergers and Acquisitions; Valuation; Value Creation; Business Divisions; Capital Structure; Food; Bids and Bidding; Retail Industry; Consumer Products Industry; Food and Beverage Industry; Australia; United States

Citation

Esty, Benjamin C., and Lauren G. Pickle. "Bega Cheese: Bidding to Bring Vegemite Back Home." Harvard Business School Spreadsheet Supplement 218-701, December 2017.
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About The Author

Benjamin C. Esty

Finance
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More from the Authors
  • Tempur Sealy International (A, B & C) By: Benjamin C. Esty and Daniel Fisher
  • MTN: Unlocking Value While Driving Socioeconomic Progress By: Benjamin C. Esty, Pippa Tubman Armerding and Dilyana Karadzhova Botha
  • SpartanNash Company: The Amazon Warrants (A) By: Benjamin C. Esty, E. Scott Mayfield and Daniel Fisher
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