Logistic Integration: The Overlooked Force Driving The Future Of The Kraft Heinz Merger

Open Access
Author:
Vankleeck, Tanner
Area of Honors:
Supply Chain and Information Systems
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Robert Alexander Novack, Thesis Supervisor
  • John C Spychalski, Honors Advisor
Keywords:
  • merger
  • acquisition
  • Kraft
  • Heinz
  • logistics
  • finance
Abstract:
Over the past three decades, mergers and acquisitions have become an integral component of the economic system. Although the financial crises of 2008 cut M&A activity in half, the past four years have seen volume and value of M&A deals recover to near record highs. Fueled by cheap credit and a need to expand, the economy is appearing to be in the midst of another merger wave. Although the macroeconomic events driving these waves and the individual motives behind each merger are ever changing, the failure rate of mergers has remained fairly constant. Between sixty and eighty percent of all mergers end without achieving the desired economic return. Although much research has been done regarding this topic, success rates have not improved. The issue concerning many of these deals is that they are only analyzed on the financial level, and not at the logistical operating level. The result is that many potential financial synergies and gains are not realized since the logistics networks either cannot be combined or the integration is handled poorly. Through the lens of the Heinz and Kraft merger, this study provides a framework for firms to use in analyzing supply chain synergies prior to a merger while showing that potential financial synergies can be derailed by poor logistical integration.