Cor­po­rate raiders are a mer­ci­less bunch

CityPress - - Business And Tenders - Muzi Kuzwayo busi­ness@city­

Once they set their sights on you, you have lit­tle chance of es­cape. There is noth­ing like them in na­ture, but try to imag­ine a vul­ture with the stamina of a wild dog, the vi­cious­ness of a hyena — which doesn’t even wait for its prey to die to start bit­ing off chunks of flesh – and then add the strength of the king of beasts. Cor­po­rate raiders are just as mer­ci­less. At the mo­ment, Unilever is like a cat on a hot tin roof — jump­ing around and hop­ing for sur­vival. “The events of the last week have high­lighted the need to cap­ture more quickly the value we see in Unilever,” the com­pany said in a state­ment, af­ter Kraft tried to take it over.

The op­por­tu­nity came through the door left open by Brexit: the Bri­tish pound lost its strength, and then, sud­denly, Unilever, with its turnover of over €50 bil­lion (R685 bil­lion) and over 400 brands – in­clud­ing soaps and ice cream – seemed di­gestible.

This is par­tic­u­larly im­por­tant to South Africans be­cause we don’t know how new own­ers of Unilever would re­duce the num­ber of brands.

If Sun­light green soap were to go, it has the po­ten­tial to wipe out an im­por­tant part of our cul­ture. What do you think would hap­pen to the spyt, ukuchatha or flush­ing the colon? Think of izan­goma and the prophets who will lose all that busi­ness. Killing Rama mar­garine could cause a na­tional rev­o­lu­tion.

War­ren Buf­fett has joined forces with a Brazil­ian cor­po­rate raider Jorge Le­mann to form a deadly duo. They first met when they both sat on the board of Gil­lette.

In the English-speak­ing world, Le­mann may not be as fa­mous as his part­ner, but he has shaken global busi­ness.

An un­con­ven­tional bil­lion­aire, he is a five-time na­tional ten­nis cham­pion of Brazil and has even played at Wim­ble­don.

He quit ten­nis when he re­alised that he would never make it as one of the top 10 play­ers in the world.

Le­mann, the founder of 3G cap­i­tal, is a real strate­gist — a true plot­ter, cun­ning, yet classy, as Buf­fett de­scribed him.

He bought con­trol­ling stakes in two Brazil­ian brew­eries, and then merged them to form AmBev, ba­si­cally tak­ing con­trol of the beer mar­ket in South Amer­ica.

He then in­vaded the Euro­pean mar­ket, merg­ing with In­ter­brew in a deal val­ued at more than $11 bil­lion (R142 bil­lion).

InBev was born, and top­pled An­heuser-Busch as the largest brewer in the world.

It was time to in­vade North Amer­ica, and $52 bil­lion bought Le­mann con­trol of his US ri­val, An­heuser-Busch, and AB InBev was formed.

There was stiff re­sis­tance, in­clud­ing from for­mer US pres­i­dent Barack Obama, al­beit be­fore he took of­fice.

Only Lon­don and Jo­han­nes­burg were left, and for $100 bil­lion, he cap­tured SABMiller and took con­trol of over 30% of the world beer mar­ket.

But wait, there’s more, as the com­mer­cials say. He and War­ren Buf­fett also con­trol Kool-Aid, through Kraft Heinz, and in 2009 they put up a hos­tile bid to take over Cad­bury, which they won.

Now they’re af­ter Unilever, and their open­ing bid is $143 bil­lion.

“Costs are like fin­ger­nails. You have to cut them con­stantly,” is what seems to be the mantra at 3G.

Af­ter tak­ing over Heinz, the com­pany fired 600 peo­ple at head of­fice and 9% of its north Amer­i­can work­force.

At Cad­bury, they shut down the Somerdale choco­late fac­tory and fired 400 work­ers.

Af­ter the SABMiller takeover, the new bosses said they planned to save $1.4 bil­lion per year.

The jury is still out on a com­fort break, but it can­not go against the tenet of cap­i­tal­ism that some will make money, and oth­ers will lose it.

UK Prime Min­is­ter Theresa May is sus­pected to be on the side of Unilever, but these guys have taken on greater politi­cians be­fore, and won. Kuzwayo is the founder of Ig­ni­tive,

an ad­ver­tis­ing agency

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.