Reference no: EM133028642

The history of Molson started over 220 years ago when John Molson invested in a little log brewery. Over the next two centuries, Molson had acquired a steamship line, a luxury hotel and a theatre. In 2005, Molson and Coors merged to become the third-largest beer maker in the world, with a market cap of US$8 billion. After two centuries, one would expect Molson to be experts on the management and integration of acquisitions, and yet in 2002, Molson acquired Brazil's second-largest beer maker, Kaiser, for US$765 million. Four years later, the company was worth US$68 million, thus experiencing one of the worst corporate losses in Canadian business history. The acquisition was costing $100 million per year just to survive, and Molson lost 50 percent of the market share. Analysts have suggested that one of the reasons for failure was the use of North American management techniques in the very different South American business climate. The company should have delegated decision making to local operators and had at least one independent director on the board from Brazil. The bureaucracy in Brazil is overwhelming, and it is vital to have local partners who understand this. The second error was the attempt to bring the Brazilian beer, Bavaria, to Canada to penetrate the premium beer category. This, too, was a disaster, not helped by a soft porn marketing campaign, and Bavaria is no longer being sold in Canada. In 2005 Molson-Coors Brewing purchased a craft brewer, Creemore Springs. Creemore was a highly successful small-time brewery, located in a small town in central Ontario. The image of a small-time brewer that did not advertise and cared deeply about its product was put at risk when Creemore was acquired. Creemore produced a fraction of the total amount of beer that MolsonCoors produces. After the acquisition, Creemore retained the same brewmaster, most of the same employees and its management retained almost complete decision-making authority. They chose not to use Molson's production facility, which can produce 1,000 cans a minute and instead maintained production in the town of Creemore where they can produce 21 cans a minute. This acquisition has been successful with Creemore expanding its distribution while maintaining their reputation

There are four generally-accepted cultural outcomes when an organization is involved in an M&A. Describe and explain each of these outcomes and apply them to the case study. Can the cultural outcomes be used to identify the difference in the success between the acquisition of Kaiser and the acquisition of Creemore?