Proceedings of the 3rd European Conference on Intellectual Capital

Sorin Anagnoste and Gabriela Dumitru
broadening <strong>the</strong> customer base and increasing market share in developed countries. It relies on a new,
more educated class <strong>of</strong> executives driven to expand <strong>the</strong> scope <strong>of</strong> <strong>the</strong>ir business activities.
Consider <strong>the</strong> motives behind Tata Motor’s pursuit <strong>of</strong> <strong>the</strong> traditional British brands Jaguar and Land
Rover. So far, Tata has produced only simple, cheap cars and it is now trying to expand into Western
markets. Acquiring <strong>the</strong> Jaguar and Land Rover brands <strong>of</strong>fers Tata access to production technology
and distribution channels. It also changes <strong>the</strong> perceived quality <strong>of</strong> Tata products in <strong>the</strong> established
world. While this brand-buying met well result in a positive spillover for <strong>the</strong> Tata brand, it could also
harm <strong>the</strong> established brands as <strong>the</strong> spillover effect works both ways.
Acquirers from developing countries are pursuing spectacular majority acquisitions. For example,
petrochemical giant Saudi Basic Industries Corporation (SABIC) acquired GE Plastics for $12 billion.
This transaction gave SABIC, already in <strong>the</strong> top 10 petrochemical companies globally, strategic
access to markets in <strong>the</strong> United States and Europe and improved competitiveness.
Huge deals are never<strong>the</strong>less not one-way events. Transactions by developed countries into emerging
markets still represent <strong>the</strong> majority <strong>of</strong> deals, as evidence by transactions such as Vodafone’s
purchase <strong>of</strong> Hutchison Essar in India that secured its position as a global market leader and gained a
foothold in <strong>the</strong> fastest-growing and second-biggest mobile market in <strong>the</strong> world. Transactions involving
companies from countries at different stages <strong>of</strong> economic development pose unique challenges for
acquirers and require specific skills. (Ro<strong>the</strong>nbuecher and von Hoyningen-Huene, A.T. Kearney 2008).
4. Case study – Bere-Mures acquisition by Heineken Romania, M&A driven by
strategic market movement
The beer market followed a strong consolidation process in <strong>the</strong> recent years while <strong>the</strong> big producers
were fighting for a top position through acquiring as much local producers as possible. There is a
natural tendency <strong>of</strong> industries towards consolidation (please see figure below) and <strong>the</strong> domestic beer
market was no exception.
Figure 5: Natural trend <strong>of</strong> industries consolidation
Source: Perry, S.J. and Herd, J.T. (2004) Mergers and acquisitions: Reducing M&A risk through
improved due diligence, A.T. Kearney, Vol. 32 No.2
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