The purpose of the case is to consider the main opportunities and pitfalls after the acquisition of Cedevita by Atlantic Trade d.o.o.
Slovenian Atlantic Trade d.o.o. has developed from a small company, with only a few employees, into a modern company, which, together with its interest-bound companies, has more than 400 employees. Cedevita d.o.o. today unites activities in food product development, production and sales in Croatia and export markets for nutritional food and beverages; such as instant drinks, teas and candies and holds the leading market share in Croatia, Slovenia, and Bosnia & Herzegovina.
The acquisition of such a strong brand name would allow Atlantic to move beyond the traditional local market and establish a regional presence. There were very few brands with the name recognition of Cedevita. This could provide the springboard for activity outside Central Europe. Another consideration was the strong movement into manufacturing that was possible with the acquisition. There was a certain advantage to acquiring a manufacturing operation that was running so smoothly and that would require a minimum of management attention. The timing of the acquisition was perfect and the opportunity could not be ignored.
In spite of all these advantages, there were some concerns. First there was the issue of corporate culture. Cedevita was part of Pliva, a large and powerful firm. Because of Pliva's size and success, Cedevita had available a great many resources and was used to having excellent technology available in a stable environment. Atlantic on the other hand, was a dynamic, flexible, lean organization that operated with significantly less resources and whose managers were comfortable with change. A second concern for Tedeschi was his worry that Atlantic would lose its focus. Lastly, there was the major concern of financing the acquisition. The economic conditions of Central Europe and the availability of funds from various sources may require a complicated financing scheme.
Author: Alexandru-Ioan Mincu, Ronald T. Pannesi
Institution: IEDC-Bled School of Management
Number of pages: 20
Language: English
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