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Thursday, December 9, 2010

What Went Wrong With Kao`s Purchase of Kanebo?

In an effort to increase business and sales Kao Corporation spent roughly 400 billion yen to acquire Kanebo and so far the acquisition has not produced the desired results.  In fact the combined operating costs of both Kao and Kanebo have only resulted in operating losses and declining sales.
Theories of Kanebo being too big, in fact being the larger cosmetics brand than Kao have been mentioned as well as little-to-no integration of Kao management into Kanebo.  In fact besides the integration of the distribution system which realizing cost savings of 13 billion yen, there seems to have been little attempt to have the companies work together at all.
What do you think made this potentially strong acquisition inefficient? 

Information Kao Corporation & Nikkei

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