Unilever's Acquisition of TIGI - ICMR Case Studies and Management Resources

Details

Case Code : CLBS063
Publication date : 2009
Subject : Business Strategy
Industry : Consumer Packaged Goods
Length : 04 Pages
Price : Rs. 100

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Key words:

acquisition, portfolio management, Unilever, brand image, Tony & Guy, TIGI, innovation, consumer packaged goods, personal care, haircare, debt free basis, logistic, retail channel, distribution, depreciation, amortization

Note

* This caselet is intended for use only in class discussions.
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Abstract:

On January 26, 2009, Anglo-Dutch Consumer Packaged Goods major, Unilever announced its acquisition of the TIGI hair care division and educational academies from Tony & Guy USA Inc. With this acquisition, Unilever would establish its presence in the premium hair care segment while TIGI would be able expand into new international markets. Analysts opined that the outcome of the deal would be positive since Unilever would be able to leverage on the strengths of TIGI's hair care business. Some analysts, however, felt that because of the economic slowdown, the deal would take time to create value for Unilever.

Issues:

» Merger and Acquisition
» Rationale of M&A
» Expansion
» Portfolio management

Introduction

On January 26, 2009, the Unilever Group (Unilever), an Anglo-Dutch Consumer Packaged Goods (CGP) major, announced its acquisition of TIGI from US-based hairdressing company, TONI & GUY USA Inc. (T&G) for US$ 411.5 million. With this acquisition Unilever would gain access to TIGI products and education academies while T&G would retain the ownership of its hair salon business...

Questions for Discussion:

1. Discuss the rationale behind Unilever’s acquisition of TIGI. What are the potential benefits to Unilever and TIGI from this acquisition?
2. Critically analyze the future of the deal in light of the current economic slowdown.

Unilever's Acquisition of TIGI*