Éxito’s Post-M&A Integration: Unlocking Synergies in a Latin American Retail Chain

Description

Éxito’s Post-M&A Integration: Unlocking Synergies in a Latin American Retail Chain: Abstract

Following the acquisition of the controlling majority of Grupo Pão de Açúcar of Brazil (GPA) and the whole property of Libertad in Argentina, Éxito, the leading retail company in Latin America, had to realize US$160 million in synergies (recurring EBITDA) over five years. This goal was achieved two years earlier than expected since instead of fully integrating the acquired companies, Éxito selectively coordinated the most valuable synergies. However, the decision to centralize or decentralize created tension among Éxito’s top management team, with some members arguing for a strong centralized administration while others argued for giving greater autonomy to the business units. This is a common debate following mergers and acquisitions as companies question which corporate logic would most efficiently create economic value (synergies).

Teaching objectives

Students must consider the company’s objectives and possible synergy initiatives to determine which corporate management logic would be best suited to achieving synergies in a post-M&A integration.

Additional information

Teachers’ notes are available for university teachers only. Please contact the HEC Montréal Case Centre.