Ben & Jerry's Homemade: The Unilever Scoop

A follow up for Ben & Jerry's Homemade (UVA-F-1364), this case is suitable for MBA, EMBA, and GEMBA programs, and could work as a stand-alone undergraduate introduction to corporate finance and M&A or an introductory strategy class on M&A or post-merger integration. Did the Unilever/Ben & Jerry's merger yield both firms' fundamental objectives? What did the market think? What did each get from the deal? What can students tell about where future value will lay? The case allows students to discuss post-merger integration issues and what makes for a successful merger. The case requires little or no calculations. Excerpt UVA-F-1656 Aug. 18, 2011 BEN & JERRY'S HOMEMADE: THE UNILEVER SCOOP Four offers were on the table to purchase Ben & Jerry's Homemade (Ben & Jerry's) in early 2000; in the end, Unilever's deal was by far the most attractive. And now, 10 years after becoming a subsidiary of the Dutch global consumer product company, much had changed at Ben & Jerry's—and much had remained the same. By the time the purchase was announced in South Burlington, Vermont, on April 12, 2000, Ben & Jerry's pre-deal stock price of $ 21 had increased substantially, to just shy of $ 35, and the company had $ 237 million in sales and $ 3.4 million in earnings. Unilever had increased its earlier tender offer of $ 36 to $ 43.60 per share or $ 326 million total, to be paid in cash (see Exhibit 1 for stock price charts). Both Unilever and Ben & Jerry's hoped to benefit from the acquisition. The Unilever muscle offered Ben & Jerry's an opportunity to scale up and enter several new markets internationally—something it had not been able to do previously. Unilever was one of the largest global firms in the world operating in 88 countries, employing 255,000 worldwide, and earning sales over $ 45 billion in 1999. Within the US, the company had 66 offices, manufacturing operations in 23 states, 22,000 people, and over $ 8 billion in sales. With increased access to capital and resources, Ben & Jerry's would have the potential to dramatically increase the size and social impact of its brand. . . .