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Advisor(s)
Abstract(s)
The aim of this paper is to propose an acquisition of Chocoladefabriken Lindt &
Sprüngli AG (Lindt) by Nestlé SA (Nestlé). Nestlé is a multinational conglomerate
operating in the food and beverage industry. The brands of the firm are known
worldwide. To enhance its confectionery business a deal with Lindt is proposed
hereafter. An acquisition of Lindt makes strategically as well as operationally sense.
Both firms operate in the chocolate business. Lindt is known to be a premium seller
while Nestlé serves the mass market. Therefore, a combined firm could create
substantial synergies and improve its market share.
Lindt was valued to be worth 16.5bn (or 75.676 per share)1 with several valuation
methods. As of the 12th May 2015 the firm traded at 58.80 which indicates a relatively
high price. This paper suggests an acquisition price of 75.676 per share for 100% of the
shares which represents a premium to the current market price of 28.7%. The
acquisition should be financed with 39.2% of cash and 60.8% of debt. This is expected
to lead to an increase of EPS and thereby increase the value of the shareholders.