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Al Ahram Beverages

Decent Essays

Case Analysis Al Ahram Beverages Company “2” By: Marmina Abdel-Malek 900 00 1809 Fall 09 I- Overview: ABC was a public company originally found in 1897, that has been nationalized in 1963, until it had been privatized in 1997 and acquired by the Luxor Investment group represented by Ahmed el Zayat as a CEO and board chairman. Luxor group is an American investment group focusing on investment more than the business itself. Zayat’s vision and objectives: Marinating local market dominance and transforming the company from a domestic brewer to a leading edge multinational beverages company. II- Situation Analysis: - General Environment Analysis o Demographic Trends  350 million Muslim in the MENA region  Platform for easy access to …show more content…

- Maximizing value for shareholders Cons: - The company would be perceived as a foreign entity, which might affect brand loyalty. - ABC, will become one of many subsidiaries at Heineken which might have negative effects on ABS such as: c. Being used in transfer costs operations, making ABC serve other subsidiaries and making losses d. Serving the global strategic goals of Heineken which might not always for the best interest of ABC. B. MBO: Al Zayat acquiring ABC jointly with Banque Misr Pros: - ABC continuing its success story leveraging the experience and tactics of el Zayat. - With the Banque Misr joint venture, the company would be perceived as national entity and would receive more support from the government and citizens. - Maximizing value for shareholders if acquired with the same amount as Heineken group. Cons: - Slower international expansion - Religious movement forcing Banque Misr from pulling out from alcoholic (or any non-Islamic friendly businesses). Recommended Action: I would recommend selling ABC to Heineken because Heineken’s resources and international presence will help ABC grow in a sky rocketing speed. At the same time, Heineken’s acquisition maximizes the shareholders value (i.e. Luxor Group) who originally appointed Al Zayat for this purpose. However, ABC and Al Zayat have to make sure that the Heineken’s strategies, goals and interests are aligned with ABC’s and not exploiting ABC to serve any other

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