Mergers & Acquisitions Roundup

In recent months on this blog I have updated and followed up on a variety of mergers and acquisitions in a variety of different industries. The past week has seen some movement on some of those proposed mergers or attempted hostile bids or whatever the case may be; the best way to update them is to provide a summary of each situation.

The M&A market is expected to gain traction in the coming months after a slower than normal start to the year, especially in certain industry types.

CVS – Aetna
This proposed mega-deal made the news on Wednesday because the $40 billion debt deal that CVS is undertaking as part of the nearly $70 billion dollar merger is going to lower their credit rating.

It is no secret that certain lending institutions would consider CVS a credit risk with taking on such a significant amount of debt at one time. It was a component of the deal that nobody discussed when it was initially announced.

Then, on top of that debt load issue, are the rather legitimate conflict of interest and consumer protections aspects of this deal which are still being reviewed. The general consensus is that a foundational problem with this merger is the combination of a major health insurer with a major retail pharmacy chain which has a parent company involved in healthcare services.

It will be interesting to watch this merger, if approved, it could be a situation where CVS Caremark wins the battle but loses the war.
Broadcom vs. Qualcomm
This attempted hostile takeover by Broadcom of their U.S. based competitor, Qualcomm has been a very strange scenario from the beginning.

The whole backstory is very complicated, and some great reporters and financial news services have provided insightful reporting on this convoluted mess. Broadcom is a tech company based in Singapore and they have attempted to buy Qualcomm multiple times at different valuations.

The problem for Qualcomm is that they do not have another willing investor or potential suitor that they could join forces with in a more amicable way to stave off Broadcom.

Then, to top it all off, the U.S. government got involved in the past week to temporarily halt the potential merger over concerns that a foreign held company was acquiring a U.S. based company with certain proprietary technologies in telecommunications. They have certain regulatory concerns over the deal.

Broadcom has now pledged to the U.S. government on Wednesday that they will invest in the training of American engineers and others in the workforce to keep high-paying, “good” jobs in the United States.

The whole situation is a disaster and it has been from the beginning. I am not sure if the federal government is going to sign off on this proposal. That creates uncertainty for the future of Qualcomm as well.

Smuckers & ConAgra

What struck me about this proposed deal (which is now dead) is that in my time in the food industry ConAgra was always usually in the role of the buyer. In this case, they were looking to sell their Wesson brand cooking oil business to JM Smucker Company.

The federal government shutdown the deal over anti-trust concerns citing that Smucker would then control about 70% of the entire cooking oil market. The government felt that this would be unfair to the consumers and could create price hikes that would limit consumer choice.

The Smucker side of the story is, in short, that the government used inflated numbers and did not take into account the impact of private label brands and smaller regional brands in the cooking oil market. I must add in the defense of the government, that not too many smaller brand labels of cooking oil jump to my mind.

I could understand the rationale behind Smucker (who generally make smart decisions in M&A activity) would want the Wesson brand. I can only predict that ConAgra wanted to sell the brand because they are moving away from holdings in that segment of the industry and they would have used the cash from the deal to invest into more core strategic areas of new business development.

Comcast versus Disney/FOX Over Sky TV

The latest bidding war is just heating up between Comcast and Disney/FOX over the rights to SKY. A major investment bank downgraded Comcast stock after they put that offer on the table for SKY.

I understand Comcast trying to bolster their core business in this play for SKY, but it does make you wonder if the deal is done whether or not they will have overextended.

Bayer & Monsanto
A major mega-merger which I have covered since it was announced. The European Union issued a statement saying they will have a vote on the proposal soon after multiple postponements in recent months.

This merger proposal will have an impact on the farmers, the consumers, and the price of food supplies. The introduction of more potential GMO containing seeds is another concerning aspect of this deal that merits the attention of the public.

Rite Aid and Albertson’s

The debacle that was the failed attempt of Walgreens and Rite Aid to merge, left Rite Aid in a precarious situation when stacked against larger competitors.

The list of suitors for Rite Aid within the retail pharmacy landscape was slim to none, so they went outside the box a bit and found a partner in Albertson’s to bail them out.

Albertson’s is a large retail grocery chain for those who do not know, and they used to own pharmacies that were operated within their grocery stores primarily. So they understand the aspects of the retail business and some of the dynamics of the retail pharmacy channel.

This merger actually makes some sense and will allow Rite Aid to stay alive in an increasingly competitive market.

That is the roundup on mergers for now. I am sure that one or all of these proposals will have some developments as we move forward in the coming weeks. Stay tuned.

Know If It Is GMO: Campbell Soup Label Disclosure

It has been about a week and a half since The NY Times and other mainstream news sources reported that Campbell Soup Company has announced that it will disclose on their product labeling all genetically modified or genetically engineered ingredients across every entry in all their product lines. I have reported on the GMO labeling issue in the past, especially with the situation in California, where all the huge food companies joined together to defeat that proposed ballot initiative.


This choice by Campbell’s Soup at this time will certainly apply pressure to other food industry players to comply in disclosing their GMO containing products. In the process, the federal government will also be under scrutiny, particularly the FDA, to initiate fundamental and substantive progress on a labeling requirement system for genetically modified ingredients in consumer food products.


The component of the decision by Campbell Soup that is significantly newsworthy is the size and scope of the amount of products it covers. This food industry giant has several brands encompassing the full range of the grocery channel from Prego sauces, Swanson broths, V8 beverages, and Pepperidge Farms bakery products.


The iconic Campbell’s Soup brand alone has an enormous amount of products especially with the line extensions of recent years to add lower sodium and gluten free soups for an increasingly health conscious American consumer. The reality of the consequences for this move sent shockwaves through the food industry and through the Wall Street analysts who evaluate the factors which will potentially impact a given publicly-traded corporation such as Campbell.


In some of the media reports I researched, it was noted that some investment analysts believe that this choice toward full disclosure by Campbell’s is going to “scare the consumer” when they pick up a can of soup and read that it contains genetically engineered ingredients. These same reports indicate that a drop in sales which will cause a chain reaction to a decrease in revenue will cause a drop in the stock price. The competition in the soup aisle and the other grocery aisles could stand to benefit from this decision by Campbell’s.


The move to full disclosure of these ingredients will serve as a stark dose of reality to the average American consumer of just how widespread the use of genetically engineered products is within the food supply currently. The average consumer may, at that point, start to question whether the competition in the aisle also contains GMO ingredients. The impact of this decision on the sales of healthier trending grocery outlets such as Whole Foods, Wegman’s, or Trader Joe’s remains to be seen.


Furthermore, this decision will inevitably shift the focus onto the fact that the key ingredients in many of our food products: corn, soybeans, and sugar beets are all genetically engineered. The alternative sources of these staple commodities which are grown currently in conditions that are organic or GMO free are produced in nowhere near the quantities needed to sustain the entire food supply. The global farming system could not produce those crop yields of GMO free food ingredients if they wanted to because the seeds are genetically modified and the soil of so much farmland is contaminated with pesticides and chemicals such as Roundup.


Green Mountain Debate


Vermont passed legislation on the state level requiring food sold there to have a full disclosure of genetically engineered ingredients on every product label. This is thought to have been the driving factor behind the decision by Campbell’s Soup Company to make the change to their labels across the board.


The legislation passed in the Green Mountain State also brought about renewed vigor in the food industry regarding the debate over the GMO disclosure laws. One side of this discourse feels that the food industry should be insulated from having to disclosure this information fully, yet another group feels that the disclosure should be limited in scope. Further still, a third faction of this argument believes that the federal government needs to pass legislation that supersedes the state government level activity on this issue.


In fact, I believe that the motivation behind Campbell’s Soup and their decision to fully disclosure the GMO ingredients in their respective products is to push the federal government to adopt a coherent policy for the entire industry. This new label disclosure by a major player such as Campbell’s “moves the needle” on the conversation with the federal government and food industry leaders. When asked about the motivation for the decision in an interview with the NY Times, Campbell Soup Company CEO, Denise Morrison, explained that the consumer has “the right to know” if a product contains genetically modified components.


In the view of the food industry players involved, most of them would rather deal with a federal mandate on how to label GMO ingredients than the alternative, which is to deal with each individual state passing their own procedures relative to the labeling of these ingredients. The rationale behind this viewpoint is due to the fact that changes to any food product label are expensive and time consuming for the food companies involved.


A system for GMO disclosure which is reliant on the legal activity of 50 separate state governments that could come up with 50 different procedures or sets of requirements for a label on a food product is a recipe for disaster. It will dominate the time for numerous departments in the respective food company, it will drive up labor costs because the labels will have to be switched out during the production runs depending upon which state the product is being distributed to, and it will increase the cost to the consumer as well.


Conversely, the federal system would allow for one universal change to the label of a given product which would be effective across the country and be far more efficient for everyone involved. However the system has to be done in the right way, it should be cohesive and inclusive so that circumvention is not attainable. Some consumer advocacy groups linked to the “no GMO” movement have voiced concerns that the federal system may provide loopholes for the food industry to get around fully disclosing the specific genetically engineered ingredients in their products.


The argument could be made that this situation is not a clear victory for the “no GMO” movement because we still have no federal mandate on a universal labeling system, the state level legislation is still active which forces those groups who are advocating for “right to know if it’s GMO” to fight separate lobbying battles in each state, and the bottom line is that the GMOs are still in our food we will just be told what they are exactly.


This choice by Campbell’s is clearly an indication of the strength of the healthy eating and wellness trends in the American consumer landscape. In the months to come it will be interesting to see which companies within the consumer packaged goods industry will follow suit with label disclosures on GMO ingredients.


In my professional experience in the food industry working with product line extensions across a variety of segments and dealing with label declarations, Campbell Soup Company was bold in this move and correct in their assessment that we need a federal system for GMO disclosure. A state-by-state format for this type of consumer labeling situation is a nightmare scenario for all parties involved. The need for a decision by federal regulatory entities needs to become a high priority in 2016, the American people and the food industry need it to happen sooner rather than later.


The next round in this fight is to eliminate GMOs which is an entirely different challenge with its own set of issues.



(Frank J. Maduri is a freelance writer and journalist with a professional background in marketing for the food, pharmaceutical, and healthcare industries. He has experience with food and beverage line extensions for national consumer products brands involving compliance with federal and state labeling requirements.)



The Value Added Sales Process

The sales process has advanced over the years with the advent of certain technological advancements, but at the core of effective selling are certain “tried and true” principles.  One of those principles is known as value added sales. I will draw upon my extensive professional experience in sales and marketing to detail this principle of selling including practical methods to utilize in your business.


Valued added sales is an approach that is very effective, but it is a selling method which can take a long period of time to yield results. However, those results are usually at a very impactful and measurable level, which is why it is still an important approach to selling either a product or a service.


Value Added Sales – My Experience


I have utilized the value added sales approach in my own career across various industry types. I find that this method of selling is very effective, but it is largely pro-active, so it requires a self-starter type of sales person with a great deal of discipline.


Please allow me to qualify that last statement further. The value added sales approach requires the sales person or account manager to introduce a new piece of information on each sales call which is of some value to the customer.


It requires a great deal of discipline for two main reasons:

  1. The sales person must keep organized records of all prior calls (which is a good standard practice) but with a record of what was used on each call to “add value” to make sure this information is not used again at the same customer account. In sales roles where you have high call frequency (pharmaceutical, medical supply, telecom services) this can become an issue if the data entry on customer interaction is not done.


  1. The sales person or account manager must do research and extra “leg work” to find what they are going to use on each respective sales call. If you are going to present an article on an emerging trend, that requires time to research trade magazines and other information sources and then make copies of the article for the customer. When you are in a sales role where you are required to make a certain number of calls per day or per week, then the time to prepare and organize this extra work comes “after hours” in the evening or at night. That requires a good degree of discipline.


In my experience, I have used the value added sales approach to enhance the selling process for both products and services. It can be implemented for either type of sale as well as B2B sales or B2C sales.


The key to the value added sales process is that the sales person must know their audience. If the audience is a physician or surgeon you should prepare a value added piece to your presentation that they would find of interest. If the audience is a group of product developers at an energy company, then you must have a piece of information that they will find important to their needs or business operation.


Tips and Potential Pitfalls


I have found in my past experience that the best way to prepare for the value added sales process is by starting slowly. I would suggest the identification of certain accounts, clients, or customers which can be improved in some way.


Then, I would set up my sales call plan and select six ideas for value added components for each customer or account. I would follow that step by gathering resources to provide that value added piece.


When I was half way through that six call cycle for those identified accounts, then I would identify six more components that would add value to that customer interaction. That brought me to twelve calls.


This approach was systematic, when I was in medical sales, I would see my top accounts once per week. This plan of doing six calls and then another six calls with value added enhancements brought me to twelve weeks, which was the end of the quarter.


The potential pitfalls to this approach are numerous, this approach requires planning. If you have some other issues that present themselves in your personal life, or if you are asked to work on a special project for your job after hours by your boss; then that planning time is going to be out the window.


The value added approach does not work without the planning and organization of finding the right piece of information on a product or industry trend which will make an impact with the respective customer.


The other most common pitfall is the tendency to “roll out” the program too quickly to all of your accounts or customers. That mistake will usually end in disaster for you and the relationship building process at your accounts.






The implementation of a value added sales protocol for your business has two main approaches:

  • Custom approach
  • System approach


The custom approach is the scenario I detailed earlier. It is where the sales person or account manager has the freedom and autonomy to determine the best way to implement the system in a given sales territory.


Furthermore, the custom approach allows for the sales person to select what value added components will be used at each individual account or client. The decisions are solely with the sales person or account manager in how to implement this important selling methodology.


Conversely, the system approach to the implementation of the value added sales process essentially strips the sales person or account manager of any input into the manner of introduction of this concept into a given territory.


The company controls all aspects of the value added process by dictating to the sales person which accounts will be given the value added approach.  In the system approach, the company also decides how the value added component of the call plan will be communicated.


The most common techniques utilized in the systems approach are:

  1. Fax blast
  2. E-mail blast
  3. E-mail newsletter
  4. A promotional item or product sample


These techniques tend to be viewed with mixed results. In my experience, I have worked with companies who had some success with the “fax blast” or “e-mail blast”. The issue with those techniques are, when they fail, it tends to really turn a customer off.


The other issue with those techniques are that they tend to be one message on one product or product line, or one specific service which is sent to all your customer accounts. It is too much of a “cookie cutter” approach to provide true value to a customer.


I worked with a company which had, over the years, compiled a file of accounts that had contacted them saying they no longer wanted to receive the fax blasts every week.  A mistake occurred during a change to new software and the fax blast went to all the accounts including the ones on the “do not fax” list. We had some angry customers, which is never good, and they remained angry for a while.


The e-mail newsletter at least has some variety to the content which makes it applicable to most of your customer base. However, my concern with this technique is that it is impersonal, and selling is a very personal, relationship driven situation when done correctly.


The promotional sample technique has some inherent deficiencies too, particularly when it is the same product sampled across the board. In the event that the customer already has used the product and formed an opinion on it, then it looks bad to send them a sample of that same product.


I have also worked for companies which have a hybrid approach to the implementation of this important sales process. In this approach, the company still exerts some influence over how the sales person will manage the value added sales process.


The company will conduct monthly or quarterly newsletters or fax blasts, but as a support mechanism to the program, not as the primary driver for business development. The sales person will have the independence to have some input as to which accounts should be introduced to the value added program, and also is given the authority to determine what the value added message will be at a respective account.


The hybrid approach can work pretty effectively when done correctly. In the end, in my opinion, I think the most effective implementation of the program is the custom approach. I believe it works the best overall to allow the sales person the full autonomy to make those choices in their respective sales territory.



Path to Success


The value added sales process can be a very successful way to drive sales and develop new business opportunities in a given sales territory. The process is rooted in relationship building, which is one of the key factors in any successful sales program.


When you as a sales person can bring a special piece of information or new trend to a customer account, you are displaying that you understand their business and that you care about their business being successful. That builds relationships quickly.


The process helps to change the customers’ perception of you and your company within your business interactions. In a successful implementation of the value added process, the customer will now view you and the company you represent, as problem solving partners. You will not be viewed as just another supplier that wants to grow their market share or increase their profits.


The time and effort that it takes to successfully install a value added sales protocol is evident to some of your customers. This extra effort and willingness to go that “extra mile” will become a big point of difference between you and the other sales representatives that call on those same customer accounts.


That effort and energy will help you as the sales person, when that customer account is ready to launch the next big product or designate a supplier for a big project, and they choose you to get that business with them.


The value added sales process will then reach the ultimate goal on the path to success: it will grow your sales figures which will allow you to earn more through commission payments and other compensation.


I hope that this article will be of assistance to all the sales personnel and their respective companies which they represent, as the decision is being made on whether to utilize a value added selling process. The process, when implemented correctly, could have a significant impact on the sales growth of your business.