Details

Case

Educator Copy

Lipton - Brooke Bond Merger

Naim Sipra


INDUSTRY : Tea

AREA : Finance

ORGANIZATION : Lipton

LENGTH : 16

LUMS No : 02-614-2004-1

PUBLICATION YEAR : 2004

DESCRIPTION

KEYWORDS:

Lipton,Tea,Food Industry,Finance,Brooke Bond,Merger,Competitors,Horizontal Integration


DESCRIPTION:

On September 16, 1996 Junejo M Iqbal, Chairman Monopoly Control Authority (MCA) was going over the orders passed by the Members (MCA), regarding a proposed merger of Lever Brothers Pakistan Limited(LBPL) with Brooke Bond Pakistan Limited (BBPL). The proposed merger of Lipton, which was owned by Lever Brother Pakistan and Brooke Bond Pakistan Limited, would result in 70% of the tea market being controlled by one group. Iqbal had to decide whether the merger should be approved, and make a ruling.


LEARNING OBJECTIVES:

1) To give the students and example of the kind of thinking that goes with making a decision monopoly case. 2) To discuss various theories of mergers and acqusitions and try to explain the merger of Lipton with Brooke Bond in that context. 3) To discuss monpolistic competition and its impact of prices and quantity sold in order to determine the dead weight loss of monopoly.


SUBJECTS COVERED:

Finance