Case study 12 mergers and acquisitions rinnovar internaional inc (ri)

A strong, motivated, experienced, position in its field - A growth potential driven by steady demand - A diverse range of customers and suppliers - A reputation for high quality - Exce

Rinnovar Internaional INC (RI)

Case study 12: Mergers and

Acquisitions

About Rinnovar International

1 $14B Annual Revenues

2 6% Shares in the market of cosmetics, fragrance and

skincare

3 Seeking to Purchase an Established company for

increase its Products range

Finite and less productive

in certain countries, such

as South Asia and South

Problems

Advantages Disadvantages

- Risks: politic, different law and tax policies in the oversea markets, financial challenges, compromised quality, employee turnover and management

- Overlap product line

in the low sales region

- Share the ripe

A strong, motivated, experienced,

position in its field

- A growth potential driven by

steady demand

- A diverse range of customers

and suppliers

- A reputation for high quality

- Excellent customer relations

strong cashflow -turnover between $20 million and $100 million -high profit margins on its products.

Ownership

Prefer 100%, but would consider a majority shareholding

Location

Preferably in a growing, developing country, but all locations considered

Type of

business Financial Location

OUR CRITERIA

Hondo Beauty Product

Good Earth

Mumbai Herbal Product

Mumbai Herbal Product

Introduction companies

Mumbai Herbal

Product

- Location: Mumbai, India

- Established: 2004, by 02 Indian women, a famous model and a film star.

- Products: Hair and skincare Strong position in bath and shower products

Advantages Disadvantages

- Lack of experience and department to exploit foreign market and management

- Strong competition in world markets

- Profit record slowed down

- Full ownership not expected

- Strong position in bath

and shower products

- The country has great

potential with billions

of people, cheap labor

Mumbai Herbal

Product

Advantages Disadvantages

- Slowing down expansion,

- Slow growth in profits in previous three years

- Had an authoritarian management style

- Wide range of

Hondo Beauty Products

- Location: Seoul, Korea

- Established: 1982

- Products: A range of cosmetics, bath and shower

products.

Advantages Disadvantages

- Increasing competition from China and India

- The management style

is very consensual and decision-making is slow

- Strong competition from low-cost producers

- Strong position in

cosmetics, path and

shower products

- Has many partnerships

- Fast profit growth in

the previous three

- Recent bad press

- Products include many

Type of business Financial Management Ownership Location

Mumbai

Hair- and skincare Dynamic R&D department High-profile clients

Good record of profits

International sales have slowed down.

Team needs to be strengthened Company needs more exporting

Not permit 100%

ownership (50/50)

Fast-growing market for hair

Slow growth in profits

Expansion seems to be slowing down

Autocratic CEO with younger members Great tension in their team

Family want to retain a

majority shareholding

Fast-growing market for cosmetics.

Hondo

Cosmetics, bath and shower products Ultra-modern factory

in Korea Many partnerships with foreign

companies

Fast profit growth May reduce its profit margins

Consensual management style and slow decision-making.

Consider 100%

ownership by

RI with high price.

Competition from low-cost producers in developing countries

Sheen

hair

Haircare Low-cost production unspectacular Steady but

profits growth.

Profit margins have declined

An experienced team.

Have little experience of selling abroad.

100%

ownership possible

Maintained its share of the US market.

Survey of making four companies by

smart phone

Type of business

TYPE OF BUSINES S

Thank you for listening

Marking & results

Love you in every Universe