To Sell or Not To Sell: A Unique Divesture Discussion

by Cecilia Li He, MBA ‘14 (4/5/13)
Cecilia Li He, MBA ‘14

If you think our Investment Banking Immersion is only about case studies, then I am afraid you only know about the half of it, because we also get many opportunities to talk with C-level executives and learn from their real-life experiences.

This week, our assignment focused on P&G’s divesture of the Pringles business. What makes this assignment even more exciting and interesting is that P&G’s CFO came to Johnson to share his experience about this transaction.

As we are now preparing ourselves for investment banking summer internships, this assignment has enabled us to learn about M&A transactions from every number in financial models and every page of financial statements. I am particularly interested in this assignment because it allowed us to think from a client’s perspective and to try and understand their way of doing business. We also have to learn to evaluate M&A transactions not only from a financial performance perspective, but also from a corporate strategy fit perspective.

My favorite part of the entire assignment was the talk given by P&G’s CFO. He went through every detail related to this transaction (Pringles was sold to Kellogg’s), including internal discussion about Pringles’ business, how they search  for an acquirer, how they negotiate transaction price and deal consideration, and P&G’s strategy in running different business lines. I was deeply impressed by his management style and extensive experience in dealing with M&A deals. When asked about key takeaways after going through many different M&A deals, he mentioned the importance of always leaving options open that can enable you to walk away, if necessary.

I think there is no place like a university, where you have so many opportunities to learn from different people. But there is also no place like Johnson’s Investment Banking Immersion, where you are immersed deeply in banking study and able to interact with C-level executives who are shaping the finance world on a daily basis.