Report on Exchanges - INSEAD CALT

Africa and Middle East which currently represents a base of 10 special purpose seismic offshore vessels,crew and project teams. We are operating on contracts mainly for the major oil companies. I’m 37 yearsold and got 2 kids of age 3 and 5 and living together with their mother for the 13 th year in a row, but notmanaged to get married yet Now to the case:Obviously EagleRace is up against a dilemma (which is the whole point). There is always the option ofgoing back to the sponsors and try to negotiate (as per Vincent’s comments) on the terms of exclusivityand by that trying to de-risk the Bauer deal and to get both eggs in the basket by giving and taking. Therisk is always that they both lose interest in the process and EagleRace and the deals fail altogether – solet’s look aside from that assumption right now.Given that a decision would have to be taken now:There is a reputational and business risk at stake for EagleRace should a negative media storm developaround Bauer. The risk and the impact of such a media storm around Bauer would have to assessed but ifworse comes to worst it is a question of survival for EagleRace as there is no fall back on sponsorship.Would EagleRace be able handle the ethical side should the allegations be proven to be true? WouldBauer themselves survive?I assume that EagleRace has a clear view of not executing prejudice and act on rumors and on that basisthey should accept the deal with Bauer. I would however, let Bauer at least comment on the allegations(due to concern) before signing (on ethical grounds). I assume Bauer would deny the rumors and it wouldbe up to EagleRace to take the risk, but at least they have been ascertained and they can defend that theydon’t (and shouldn’t)act on rumors.The way I see it , the alternative of choosing Goodbridge will not be sufficient either way to secure thehealthy finances of EagleRace and they are indeed running out of time and options. On the basis thatBauer is only subject to rumors at this stage and there are significant risks associated to both scenarios.I would choose Bauer at this stage.Best RegardsLeif Olav…now Benoit summarizes the arguments and opinions but is still convinced that the Baueroption is incompatible with Eagle Racings values and ethics…De : Benoit.Crochelet@gdfsuez.com [mailto:Benoit.Crochelet@gdfsuez.com]Envoyé : mercredi 19 juin 2013 18:41Dear team members,We should be able to communicate our decision by Friday Midday and we didn’t formalize any decision.I understand that the majority is favorable to the Bauer’s proposal. Claus and Peter assume that Bauerdidn’t do anything wrong and that the risk for Eagleracing is limited. Vincent and Leif Olav seem to bemore attentive at the risk of reputation even if they recommend to secure the business with Bauerbecause of the lack of time to investigate different options. And I consider that we cannot associate ourbrand to a company accused of weapons dealing. Even if the latest rumors are not documented, the CIOWhilem Grünbaun confirmed that Bauers was active in the weapons industry until more than a year agowhich is to me totally incompatible with our brand image and reputation.We are not industrials looking for investors, we are a racing team looking for a partner with whom we willshare sports successes and failures. Our business is not selling cars but selling passion and performancesto our fans and the medias. Without fans we don’t exist anymore. Believe me, sponsorship is my domainof expertise, we won’t survive to scandals by choosing a sponsor associated (today or yesterday) with theweapons industry.AAA/INSEAD/062013 - 24