TOP 3 // M&A
The best cases on mergers & acquisitions from the Case Writing Centre
The majority of the cases in the GSB Collection are devoted to entrepreneurs, startups, small and medium enterprises (SMEs) – the drivers of economic growth in Africa. It is estimated that 90% of registered businesses in sub-Saharan Africa are SMEs and account for 50% of GDP. As more and more of these indigenous businesses become scale-ready, they face major decisions about which pathway to scale they will pursue. Mergers and acquisitions (M&A) represent a promising route, especially as Africa is pegged to be the next frontier for M&A globally owing to the rise of fintech and other digital disruptors on the continent. The practicalities of dealmaking across African markets, cultures, and regulatory regimes, however, present formidable challenges for enterprises and acquirers alike.
Fortunately, we have a selection of cases that give an inside view, and key learnings, of M&A in Africa. Here are our top three M&A cases:
1. “Grow or successfully disengage? Navigating the revolution of South African tower companies”
by Sebastian Prim & Professor Mikael Samuelsson
This is a textbook case for African M&A dilemmas, based on a real South African telecom, anonymised for publication. Lattice Towers is a small, founder-run telecommunications company that has just received an offer of acquisition from an international behemoth, Helios Towers. On the one hand, liquidity issues at Lattice, growing global interest in South Africa’s fast-developing telecommunications infrastructure, and personal health issues make this deal extremely attractive to founder-CEO Ian Soloman. On the other hand, Lattice’s chief operations officer, Ernest Matthews, is convinced that a more analytical approach to the proposal will show that Lattice should pursue local growth opportunities alone. Through the interplay between the CEO and COO, the case explores on the human aspects of strategic decision-making in M&A: founder vs. manager mindset, how entrepreneurs assess risk and uncertainty, psychological stress facing entrepreneurs, and the relationship between business lifecycle stage and decision-making. At the same time, readers are called to adopt an analytical, data-based mindset to calculate a fair valuation and scrutinise the acquisition proposal for a full-picture analysis.
2. “Inverroche: Maintaining brand equity in craft gin through brand acquisition”
by Tal Peer & Assistant Professor Mignon Reyneke
This case explores another set of senior executives in debate ahead of an M&A deal, this time with a marketing concern. Lorna Scott, founder of a South African craft gin producer Inverroche, has decided to sell a majority share of the company to the global brand house Pernod Ricard. The case follows as Scott and Alex Farnell, the general manager of marketing and sales, discuss Inverroche’s brand goals and whether the sale will damage their brand equity. Their dilemma hinges on how an artisanal brand can scale, and whether it can retain its authenticity in the process. It is for readers to determine whether Inverroche has made the right choice.
3. “The buyout at Tru-Foods For You”
by Professor Linda Ronnie
This case explores the internal integration process post-acquisition. Tru-Foods For You (TF4U) is an e-commerce company specialising in organic and health food products, and it has just been acquired by Marshall Foods, South Africa’s largest brand distributor. At the request of Marshall’s management, founder Katy Caldwell stays on to help integrate the 34-member TF4U team into their new company. The process proves rocky as Caldwell must confront the misalignments between her less structured, entrepreneurial approach of her team and a highly controlled, process-driven corporate. The case guides readers to consider the organisational practicalities of M&A deals, and the challenges for managers who oversee the integration phase.
Read the cases
You can find these and more cases on leadership from the GSB Case Writing Centre at Emerald and The Case Centre.
