M&A in action
I
info exchange
io What's NewS Issue 2 March 2000
Anyone reading through the deals sections in recent issues will have noticed the
growing number of M&A transactions. We've been asking the people behind the
M&A network for their take on what's happening in some of our markets.
Changing hands
One step ahead
Juicy business
Consolidation chains
At a European general managers'
conference in Paris earlier this year,
our Global Mergers Acquisitions peo
ple provided a thorough overview of their
goals, product offering, capabilities and
target customers among other key issues
Frankfurt's M&A team. fltr: Stephan Hackenberg,
Martina Rohdenburg, Sven Günther, Detlev Stroech and
Rudi Strittmatter
in what is a highly bouyant market. Obvi-
ously, this is not exclusively a European
phenomenon. But it showed that Global
M&A was very much back on track and
getting on with its priority business
following a period of some uncertainty. It
is almost a year ago since the M&A team
met in the UK to fine-tune strategy and
get the show firmly on the global road. In
the meanwhile, changes in organization
(the SRT process and later the joint
venture announcement) had clouded
future goals to some extent. However, the
number of deals coming out of Global
M&A these days proves that the basic
strategy is sound and working effectively
at rnany levels - as it was designed to do.
'We have always seen our role as a niche
player in a global environment,' explains
Brian Havill. 'That is the only way to
differentiate our services, expertise from
what is on offer from just about every
other financial institution. And if we are a
global player, then we need a global
network so we can offer our specialized
services to defined market sectors.' (See
sidebar.) Many of the deals we've covered
in this and recent issues of What's NewS
are perhaps the best illustration of what
Havill means. if you take the food sector,'
he says, 'you will see that many
companies are changing hands.
There is a lot of pressure on
producers to consolidate gener-
ated by retail concentration. And
there are few, if any, other banks
which can talk with these cus
tomers about their business with
any real knowledge. Just look at
the deal done by the Sydney office
in the poultry sector (see page 7),
or the 3i venture capital com-
pany's acquisition of Target
Worldwide Express in that often
under-recognized transport and
logistics sector.
And because we have this level of
expertise in our selected niche
markets, we find corporates like 3i asking
John Cripps and his team to look at their
whole food portfolio.'
Although Global M&A has teams
in many individual European
countries, cross-border business re-
mains a priority. And that does not
exclude deals outside of national
boundaries. Says Rudi Strittmatter,
who heads up M&A in Frankfurt,
'Basically, our goal is to strengthen
the network so that we can stay at
least one step ahead of our cus
tomers. To do that, everyone has to con-
tribute to and needs feedback and input
from our global network. Clients expect it
and we're doing all we can to make it
happen.' The Frankfurt team has been
working on establishing close ties with a
number of other countries, including close
neighbours. Says Detlev Stroech, 'We've
already set up working relations with all
RI regional offices. I think we're trying to
live the global network here in Germany.'
And it is paying off. By maintaining close
ties with other RI teams and with existing
strategie alliance partners (including
Unico), Frankfurt's M&A activities often
produce juicy deals. Take the Eckes-
Granini acquisition of Finnish OY Marli
Group's juice business in the domestic
market, Scandinavia, the Baltic States and
Russia which was signed recently. 'We
heard that Marli was interested in
divesting this activity from colleagues at
Okobank - the Finnish cooperative - via
the team in the Netherlands,' recalls
Stroech. 'We followed up because Eckes-
Granini is a major player and a core cliënt
in this sector and we prefer to go to them
with a live prospect, rather than simply
turning up periodically with a pitch on
what we could do for them if they find an
interesting deal for themselves.' As it
turned out, this was one opportunity
Eckes-Granini had not identified them
selves. The Frankfurt team was subse-
quently able to advise on the initial 20%-
stake taken by the German juice company
in Marli's dedicated business unit. After
two years, Eckes-Granini can exercise an
option for the remaining holding.
While this may not rank as one of the
world's biggest F&A deals, it is certainly
indicative of how Global M&A is operat-
ing in its niche sectors. 'If you look at the
London's M&A team. back: Christoph Friedrich,
Robert Rattray, Michael Bourke, Nic Thum,
Ftenrik Tuxen front: David Craig, Gerard
Gregg-Smith, John Cripps, Andrew Robinson
German market today,' says Frankfurt's
Stephan Hackenberg, 'you see that around
15 years ago, the retail sector began con-
solidating. The producers/manufacturers
did not follow that trend at the time and
are only now catching up. They were able