Unilever：

CanImarrywithyou？

DearColgate

Willthey“marry”？Howaretheynow？Unilever：

CanImarrywithyoGroupmember:Unilever&Colgate.Groupmember:Unilever&ColgateNews：Unilever’sCEOPaulPolmansaid:UnileverwantedtobidColgatefor$55billion.————2011.February.11News：Outline：M&A’smotivationTheriskofM&ASWOTanalyzeofeachcompanyOutline：M&A’smotivationM&A’smotivation1.Expandscale2.Increasemarketshare3.Intergrationofindustrialchain4.Addingbrandvalue5.Considerationofthecompany’sdevelopmentstrategyM&A’smotivation1.ExpandscalebranchesorofficesemployeeColgate

In≥

200

≥

40000countriesandregionsUnilever

14categoriesof

≥171,000

400brandssoldin≥

170countriesandregionsM&A’smotivation1.Expandscale:brancheso2.Increasemarketshare:M&A’smotivation

ToothpasteproductglobalmarketsharerankinChina

（accordingtoresearchin2011）Colgate:Colgatecanreach45%

2Unilever:Zhonghua、Signaloutsidethetop10

62.Increasemarketshare:M&A’s跨國企業(yè)管理聯(lián)合利華與高露潔案例分析(全英)課件3.IntergrationofindustrialchainM&A’smotivationColgate:MySAPSupplyChainManagement:VMI（VendorManagedInventory）、CBS、CollaborativeEngineresearchandinnovationcenter：9Unilever：264

productionsiteson6continents6Research&DevelopmentCenterinUK,Holland,US,IndiaandChinaGlobalHRdatabase

3.Intergrationofindustrialc跨國企業(yè)管理聯(lián)合利華與高露潔案例分析(全英)課件4.AddingbrandvalueM&A’smotivationUnileveroneofthemainproduceronfastmovingconsumergoodsintheworld.especiallyfocusonthefoodandhome-consumedfield.Butweakerinpersonalcareproducts.(toothpaste!!)Anditmakeasales-doubleenhancedplantoexpandhouseholdproductsandpersonalcareproducts.Unfortunately,thesetwopartsaretheweakerelementsofUnilever.Colgate:Colgatealmostwithasinglefamousbrandcompetesintheglobalmarket.Itfocusesonoralcareproductswithagreatsuccess.IfColgatewantstoaddingbrandvalue,itcanmakeuseofUnilever’sscientificresearchstrength,productionandsalesstrategy.Ifthey“married”——formastrongcomplementarity.4.AddingbrandvalueM&A’smoti5.Considerationofhecompany’sdevelopmentstrategyM&A’smotivationUnilever：M&Aisitsmaintraditionalstrategytodevelop.Itcanreducealargeamountofcosttoexpand.ContinueitsM&Astrategy.AndcompetewithitsbiggestcompetitorP&G.Colgate:Colgatehasalwaysbeenconsideredas“asinglebrandtodominanttheIndustry”.thebrandColgate-PalmolivedetergentsandHillspetfoodhastherapidgrowthinemergingmarketsinrecentyears.Itmaybeneedtolearnmorediversifieddevelopmentstrategy.5.Considerationofhecompany’TheriskofM&A：

FinancialMovements

in

interest

ratesFluctuating

values

of

investmentsBrandBuildingOthersTheriskofM&A：

TopartiallyfinanceanacquisitionofColgate,Unilevercouldraise10billioneurosofequity.anestimateddebt-to-equityratioof3.7timesinthefirstyearofthedealTheriskofM&A

Financial:TopartiallyfinanceanacquiOverestimateorunderestimatethevalueoffirmsleadtotherisk.Informationasymmetryisthemajorfactorwhichimpactstheestimation.e.g.equityriskdebtinformationriskTheriskofM&A

Financial:OverestimateorunderestimateTheriskofM&A

Financial:CashPaymentUnileverColgateTheriskofM&A

Financial:UnilTheriskofM&A

Financial:CashPaymentIfUnileverexpectthereisnoriskincashpayment,theymustmakethepresentvalueofincrementalofexpectedcashflow.

Netpresentvalueisgreaterthanthepaid,whereasshareholdersofUnileverwillbeartheloss.Whenthecostofcash

paymentisexpansion,andfacehugedebtburden,andthesourceoffundingdeadlineisunreasonablestructure,orlack

ofshort-termfinancing,itiseasytobringtotheacquisitionofliquiditypressure.Atthistimeifthenewcompanyhasa

lowlevelofliquidassets,itwillhavealiquidityrisk,andliquidityriskisthemostoutstandingperformanceofcashpayment.TheriskofM&A

Financial:IfUUnileverwouldbeexposedtomarketinterestratefluctuationsonitsfloatingratedebt.e.g.benchmarkinterestrates

theinterestcostofitsfloatingratedebtUnilever’sinabilitytomanagetheinterestcosteffectivelycouldhaveanadverseimpactonitscashflow,profitsandprofitmargins.TheriskofM&A

Movements

in

interest

rates：UnileverwouldbeexposedtomMoresubjecttorisksfromchangestotherelativevalueofdollars(intermsofUnilever)oreuros(intermsofColgate)Significantimpactsontheirassets,cashflow,turnover,profitsandprofitmarginsTheriskofM&A

Fluctuating

values

of

underlying

investments：MoresubjecttorisksfromchaUnilever:ConsolidatefinancialstatementsineurosBesubjecttoexchangerisksassociatedwiththetranslationoftheunderlyingnetassetsofColgateUnilever:BesubjecttotheimpositionofexchangecontrolsbyU.S.LimititsabilitytoremitdividendstotheparentcompanyTheriskofM&A

Fluctuating

values

of

underlying

investments:Unilever:ConsolidatefinanciTheriskofM&A

BrandBuilding:SustainabilityStrategy--UnileverTheriskofM&A

BrandBuildinTheriskofM&A

BrandBuilding:SustainabilityStrategy--ColgateTheriskofM&A

BrandBuildinUnilever--Developingtherightpeople,teamsandstructurestosucceedindoublingthesize

ofbusinesswhilereducingenvironmentalimpacts–CompassStrategy

TheriskofM&A

BrandBuilding:Unilever--TheriskofM&A

BraColgate--GrowingbusinessbycontinuouslyintroducinginnovativeproductsImprovingefficiencybycuttingdownonoperationalexpenses

TheriskofM&A

BrandBuilding:Colgate--TheriskofM&A

BranOthers:Exposedtomoreexternal

economic

and

politicalrisks

or

natural

disastersAffecttheexecutionoftheirstrategiesortherunningoftheiroperations.Adverse

economic

conditions

Consumerdemand

for

productsreducesRegionallyorevengloballyextendThisbusinessexpansionmaysuffer.TheriskofM&A

Others:ExposedtomoreexternaChanges

to

taxation

andprice

controls(EuropeandU.S.involved)Mayhavenegativeimpacton

the

growth

and

profitability

of

theiroperations.TheriskofM&A

Others:ChangestotaxationandpriceSWOTanalysisStrengthsweaknessopportunitiesThreatsSWOT

Analysis：SWOTStrengthsweaknessopportuni1,isthemarketleaderinoralcareproducts2,haveextensiveoversea’sreach3,strongcommitmenttoinnovation4,diversificationofproductstypeswithinthetoothbrushmarket1,thesuper-premiumtoothbrushmarketishighlycompetitive2,theelectronictoothbrushesandwaterpicksarethreateningthetraditionaloralcareproduct’smarketsharestrengthsthreatsopportunitiesweaknessesColgate-Palmolive1,thenewColgatePrecisionmaydraintheColgatetoothbrushoftheirresourcesaltogether2,mediaexpenditureisverysmallcomparedtoitsrivals3,facesitslackofprofessionaldentalendorsements1,Havemuchchancesandwaystoenlargeitsmarketshareontoothbrushmarket1,isthemarketleaderinorUnileverstrengthsweaknessesopportunitiesthreats1,diversifiedrevenuestreams2,largescaleofoperations3,strongportfolioofbrands4,focusonR&Dactivities5,focusonsustainability1,weakliquidityposition2,unfoundedemployeepostretirementbenefits3,weakperformanceinwesternEurope1,focusonemerginganddevelopingeconomies2,divestureofnon-corebusinessactivities3,growingoutofhomeeatingmarket1,dampenedconsumerdemand2,intensecompetition3,governmentregulationsUnileverstrengthsweaknessesoppIfUnilevermergerandacquisitionwithColgate-Palmolivebenefits1,UnilevercancutdownitsproductcostbytheextensiveglobalreachofColgate-Palmolive2,thetwocompanycanenlargetheirproductscaletoformScaleEconomiesEffect3,maybetheywillhaveSynergyEffectsinordertocutdownthenumbersofmanagementstaffs4,theycanuseeachother’sdifferentmarketresourcetoenterthenewmarkets5,Unilevercanstrengthenitspersonalcarepart,especiallyinoralcare,atthesametime,Colgate-Palmolivecandiversifyitsindustriestofoodindustry6,moreimportant,iftheycanwin-winco-operation,theyhavemoreresourcesandinfluencetocompetewithotherrivalsIfUnilevermergerandacquisi1,itwillmaketheUnilever‘sliquiditypositionmoreweak2,itmaymakethecompany’sscaletoolargetomanage3,itmaybepunishedbythegovernmentbecauseofitsmonopolysuspicion

4,itmaybedifficulttomanagebecauseofdifferentcorporationcultureLosses：1,itwillmaketheUnilever‘sTHANKyouTHANKyouUnilever：

CanImarrywithyou？

DearColgate

Willthey“marry”？Howaretheynow？Unilever：

CanImarrywithyoGroupmember:Unilever&Colgate.Groupmember:Unilever&ColgateNews：Unilever’sCEOPaulPolmansaid:UnileverwantedtobidColgatefor$55billion.————2011.February.11News：Outline：M&A’smotivationTheriskofM&ASWOTanalyzeofeachcompanyOutline：M&A’smotivationM&A’smotivation1.Expandscale2.Increasemarketshare3.Intergrationofindustrialchain4.Addingbrandvalue5.Considerationofthecompany’sdevelopmentstrategyM&A’smotivation1.ExpandscalebranchesorofficesemployeeColgate

In≥

200

≥

40000countriesandregionsUnilever

14categoriesof

≥171,000

400brandssoldin≥

170countriesandregionsM&A’smotivation1.Expandscale:brancheso2.Increasemarketshare:M&A’smotivation

ToothpasteproductglobalmarketsharerankinChina

（accordingtoresearchin2011）Colgate:Colgatecanreach45%

2Unilever:Zhonghua、Signaloutsidethetop10

62.Increasemarketshare:M&A’s跨國企業(yè)管理聯(lián)合利華與高露潔案例分析(全英)課件3.IntergrationofindustrialchainM&A’smotivationColgate:MySAPSupplyChainManagement:VMI（VendorManagedInventory）、CBS、CollaborativeEngineresearchandinnovationcenter：9Unilever：264

productionsiteson6continents6Research&DevelopmentCenterinUK,Holland,US,IndiaandChinaGlobalHRdatabase

3.Intergrationofindustrialc跨國企業(yè)管理聯(lián)合利華與高露潔案例分析(全英)課件4.AddingbrandvalueM&A’smotivationUnileveroneofthemainproduceronfastmovingconsumergoodsintheworld.especiallyfocusonthefoodandhome-consumedfield.Butweakerinpersonalcareproducts.(toothpaste!!)Anditmakeasales-doubleenhancedplantoexpandhouseholdproductsandpersonalcareproducts.Unfortunately,thesetwopartsaretheweakerelementsofUnilever.Colgate:Colgatealmostwithasinglefamousbrandcompetesintheglobalmarket.Itfocusesonoralcareproductswithagreatsuccess.IfColgatewantstoaddingbrandvalue,itcanmakeuseofUnilever’sscientificresearchstrength,productionandsalesstrategy.Ifthey“married”——formastrongcomplementarity.4.AddingbrandvalueM&A’smoti5.Considerationofhecompany’sdevelopmentstrategyM&A’smotivationUnilever：M&Aisitsmaintraditionalstrategytodevelop.Itcanreducealargeamountofcosttoexpand.ContinueitsM&Astrategy.AndcompetewithitsbiggestcompetitorP&G.Colgate:Colgatehasalwaysbeenconsideredas“asinglebrandtodominanttheIndustry”.thebrandColgate-PalmolivedetergentsandHillspetfoodhastherapidgrowthinemergingmarketsinrecentyears.Itmaybeneedtolearnmorediversifieddevelopmentstrategy.5.Considerationofhecompany’TheriskofM&A：

FinancialMovements

in

interest

ratesFluctuating

values

of

investmentsBrandBuildingOthersTheriskofM&A：

TopartiallyfinanceanacquisitionofColgate,Unilevercouldraise10billioneurosofequity.anestimateddebt-to-equityratioof3.7timesinthefirstyearofthedealTheriskofM&A

Financial:TopartiallyfinanceanacquiOverestimateorunderestimatethevalueoffirmsleadtotherisk.Informationasymmetryisthemajorfactorwhichimpactstheestimation.e.g.equityriskdebtinformationriskTheriskofM&A

Financial:OverestimateorunderestimateTheriskofM&A

Financial:CashPaymentUnileverColgateTheriskofM&A

Financial:UnilTheriskofM&A

Financial:CashPaymentIfUnileverexpectthereisnoriskincashpayment,theymustmakethepresentvalueofincrementalofexpectedcashflow.

Netpresentvalueisgreaterthanthepaid,whereasshareholdersofUnileverwillbeartheloss.Whenthecostofcash

paymentisexpansion,andfacehugedebtburden,andthesourceoffundingdeadlineisunreasonablestructure,orlack

ofshort-termfinancing,itiseasytobringtotheacquisitionofliquiditypressure.Atthistimeifthenewcompanyhasa

lowlevelofliquidassets,itwillhavealiquidityrisk,andliquidityriskisthemostoutstandingperformanceofcashpayment.TheriskofM&A

Financial:IfUUnileverwouldbeexposedtomarketinterestratefluctuationsonitsfloatingratedebt.e.g.benchmarkinterestrates

theinterestcostofitsfloatingratedebtUnilever’sinabilitytomanagetheinterestcosteffectivelycouldhaveanadverseimpactonitscashflow,profitsandprofitmargins.TheriskofM&A

Movements

in

interest

rates：UnileverwouldbeexposedtomMoresubjecttorisksfromchangestotherelativevalueofdollars(intermsofUnilever)oreuros(intermsofColgate)Significantimpactsontheirassets,cashflow,turnover,profitsandprofitmarginsTheriskofM&A

Fluctuating

values

of

underlying

investments：MoresubjecttorisksfromchaUnilever:ConsolidatefinancialstatementsineurosBesubjecttoexchangerisksassociatedwiththetranslationoftheunderlyingnetassetsofColgateUnilever:BesubjecttotheimpositionofexchangecontrolsbyU.S.LimititsabilitytoremitdividendstotheparentcompanyTheriskofM&A

Fluctuating

values

of

underlying

investments:Unilever:ConsolidatefinanciTheriskofM&A

BrandBuilding:SustainabilityStrategy--UnileverTheriskofM&A

BrandBuildinTheriskofM&A

BrandBuilding:SustainabilityStrategy--ColgateTheriskofM&A

BrandBuildinUnilever--Developingtherightpeople,teamsandstructurestosucceedindoublingthesize

ofbusinesswhilereducingenvironmentalimpacts–CompassStrategy

TheriskofM&A

BrandBuilding:Unilever--TheriskofM&A

BraColgate--GrowingbusinessbycontinuouslyintroducinginnovativeproductsImprovingefficiencybycuttingdownonoperationalexpenses

TheriskofM&A

BrandBuilding:Colgate--TheriskofM&A

BranOthers:Exposedtomoreexternal

economic

and

politicalrisks

or

natural

disastersAffecttheexecutionoftheirstrategiesortherunningoftheiroperations.Adverse

economic

conditions

Consumerdemand

for

productsreducesRegionallyorevengloballyextendThisbusinessexpansionmaysuffer.TheriskofM&A

Others:ExposedtomoreexternaChanges

to

taxation

andprice

controls(EuropeandU.S.involved)Mayhavenegativeimpacton

the

growth

and

profitability

of

theiroperations.TheriskofM&A

Others:ChangestotaxationandpriceSWOTanalysisStrengthsweaknessopportunitiesThreatsSWOT

Analysis：SWOTStrengthsweaknessopportuni1,isthemarketleaderinoralcareproducts2,haveextensiveoversea’sreach3,strongcommitmenttoinnovation4,diversificationofproductstypeswithinthetoothbrushmarket1,thesuper-premiumtoothbrushmarketishighlycompetitive2,theelectronictoothbrushesandwaterpicksarethreateningthetraditionaloralcareproduct’smarketsharestrengthsthreatsopportunitiesweaknessesColgate-Palmo