Case Name :      Proposed Merger of Perdigao and Sadia

Authors :           Deborah Terayama, James E. Hatch

Source :             Ivey Publishing

Case ID :            W12892

Discipline :        General Management

Case Length :    20 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

In April 2009, Perdigão was contemplating the acquisition of Sadia and a merger of the two companies. The intended share-swap transaction between two of Brazil’s biggest food companies would allow Perdigão to dramatically grow its domestic and international market share, and become one of the world’s largest players in the food production industry, while driving up profit margins by benefiting from synergies. However, Sadia had a huge short and long debt that it was unlikely to be able to service. Students must determine whether Perdigão should acquire Sadia, the basis of the proposed share exchange, and assess whether the resulting debt burden of the combined companies is manageable.