Around this time, the race to capture revenue from Internet search-based advertising was heating up. Closing one of the worst flops in corporate-merger history, Quaker Oats Co. agreed Thursday to sell Snapple Beverage Corp. to Triarc Cos. for $300 million, only 27 months after Quaker …
A merger of equals is when two firms of a similar size merge to form a single, larger company. Sprint saw stiff competitive pressures from AT&T (which acquired Cingular), Verizon ( He noted that Quaker’s loss on the purchase means Quaker lost $1.6 million for each day it owned Snapple, which makes exotic juices and iced teas.Quaker said Snapple just didn’t work out as planned.“We believed Snapple had tremendous possibilities,” Quaker spokesman Mark Dollins said. The merger of product lines failed miserably because neither company seemed to understand their distribution channels could not be easily integrated. That has led to widening speculation that Smithburg’s days as Quaker’s chief executive are numbered.Smithburg, who received no bonus over his $872,506 salary last year, declined to comment.
Other problems included poor foresight and long-term planning on behalf of both companies' management and boards, overly optimistic expectations for positive changes after the merger, culture clash, territorialism, and poor execution of plans to integrate the companies' differing processes and systems. The Quaker Oats Company, founded in 1891
William D. Smithburg appointment as CEO in 1979
4.
It was a merger of four oat mills namely Quaker Mill Company, that had bought bankrupt Quaker Oat Mill Company, a cereal mill, German Mills American Oatmeal Company and Barley Oatmeal Corporation. In this case, Quaker Oats was able to recoup $250 million in capital gains taxes it paid on prior deals, thanks to losses from the Snapple acquisition.
If a merger goes well, the value of the new company should appreciate as investors anticipate In 2001, America Online acquired Time Warner in a Lee had bought Snapple from its original owners--Leonard Marsh, Hyman Golden and Arnold Greenberg--who had started the firm to sell fruit juices to health stores.Quaker’s stock edged up 25 cents to close at $37.75, while Triarc’s stock jumped $1.625 a share to $17.375, both in New York Stock Exchange composite trading.Times staff writer Nancy Rivera Brooks contributed to this report.Quaker Oats’ decision to sell its Snapple Beverages unit for an enormous $1.4-billion loss is one of many acquisitions that went bad for buyers. Quaker struggled to exploit the merger of Gatorade, which is mostly sold in supermarkets, and Snapple, which typically sold one bottle at a time in convenience stores.The problems dragged down the total performance of Chicago-based Quaker, which had sales of $5.2 billion last year, and Quaker’s stock price badly trailed the overall stock market. Other acquisitions that went sour include:* December 1996: AT&T; Corp. spins off its NCR unit, valued at $3.4 billion, considerably less than the $7.48 billion AT&T; paid for the computer company in 1991. TIMES STAFF WRITER
At the time, AOL was the leader in dial-up Internet access; thus, the company pursued Time Warner for its cable division as high-speed Short-distance transportation also involved more personnel hours (thus incurring higher labor costs), and strict government regulation restricted railroad companies' ability to adjust rates charged to shippers and passengers, making post-merger
Finally, executives of the acquiring company should avoid paying too much for the target company. A mega-deal is a large and costly transaction between two corporations, often involving a merger of the two or a buyout of one by the other. Snapple, on the other hand, sold its drinks primarily through small independent or convenience stores, gas stations, … He retired in April 2020.Newsom takes a more cautious and stringent four-tier approach than his first reopening effort. Quaker Oats successfully managed the widely popular Gatorade drink and thought it could do the same with Snapple's popular bottled teas and juices.
Cultural concerns exacerbated integration problems between the various business functions. Quaker Oats used to be the grocery store legend. AOL missed out on these and other opportunities, such as the emergence of higher-bandwidth connections, due to financial constraints within the company.
Management pushed for a merger in a somewhat desperate attempt to adjust to disadvantageous trends in the industry. Soon after the merger, multitudes of Nextel executives and mid-level managers left the company, citing cultural differences and incompatibility. Managers at both entities need to communicate properly and champion the post-integration milestones step by step.
Closing one of the worst flops in corporate-merger history, Quaker Oats Co. agreed Thursday to sell Snapple Beverage Corp. to Triarc Cos. for $300 million, only 27 months after Quaker spent $1.7 billion to buy the maker of trendy drinks.The Quaker-Snapple fiasco joins such ill-fated business marriages as AT&T; Corp. and computer maker NCR and General Electric Co. and defunct brokerage house Kidder, Peabody & Co.But the swiftness with which Quaker’s Snapple investment eroded will make this deal a special case study of mismanagement for a generation of business students.“This has been a disaster,” said analyst John McMillin of Prudential Securities Inc. in New York. Sprint Nextel's managers and employees diverted attention and resources toward attempts at making the combination work at a time of operational and competitive challenges. Cultural clashes and turf wars can prevent post-integration plans from being properly executed.
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