min-myinnersoul

Mergers & Acquisitions are often the glamorous side of business. CEOs love  them - you go through the excitement of doing a deal, get on to the papers and TV, become famous etc etc. Most of the haggling on the deal is on the price - how much the buyer is willing to pay the seller. But how about a M&A transaction where the seller has to pay the buyer in order for the buyer to buy the business !! Fanciful ? Well, that's exactly what has happened with the sale of Fresh & Easy by Tesco to Ron Burkle . Tesco is an UK based grocery retail giant; it is the third largest retailer in the world. From the UK, where it is a household name, it has expanded in Europe and Asia. But in the US, the largest retail market in the world, Tesco was non existent. In 2006, it decided to foray in to the US with the branding  of Fresh & Easy - in small store grocery format, primarily in the Western states. It never took off and Tesco faced mounting losses despite opening some 200 stores...

This blogger is not a beer drinker.. He is therefore completely ignorant of the niceties of beer and therefore eminently qualified to comment on developments in the beer industry. In many countries in the world, people, especially men, gulp down enormous quantities of beer. Most of it is mass produced by the beer giants of the world - Diageo, Anheuser Busch, SAB Miller, Heineken and the like, including our own home grown United Breweries. Bottled or canned beer is by far the largest selling channel for beer - the one that keeps afloat the likes of Diageo, et al. But nuanced beer drinkers consider this somewhat of a travesty in beer drinking - apparently they have no taste. Hence the onset of draught beer which is served out of cask or a keg. Go to a pub  and barmaid will pour out a pint of draught, topped with a nice head. This blogger has a partiality to buying rounds for whoever he is with - not to taste the subtleties of the draught but to ogle at the barmaid - who is invariably...

There is one ritual that happens in all companies periodically without fail - an organisation restructuring. Old structures and divisions are thrown out of the window and new structures are announced. HR types take great pleasure in redrawing organisation charts, rewriting job descriptions and the like. Communication types have an orgasm designing communication packs and writing words like "restructuring to stimulate growth", "bringing the organisation closer to consumers" and such other waffle. CEOs like to stand up to the press and announce the change , to make up for lack of anything else to say about their companies. MIcrosoft did just that today , the trigger for this post. Steve Ballmer's version of the blah blah is "We are ready to take Microsoft in bold new directions". Balderdash. I have never seen a more futile activity than an organisation rejig. And yet companies do it all the time. The pattern is all too predictable. If the current organis...

In the good old days, this was an easy cliche. Tax evasion (breaking the law) was a crime. Tax avoidance (minimising paying the tax within the law) was something you were duty bound to do. Whether you are an individual, company, whatever. Period. Now it isn't so clear cut an answer.  And that says something about our times. Witness the case of Apple . It does aggressive tax planning (all within the law). It has a big subsidiary in Ireland and has done a deal with the government there for a low tax rate. It does not bring overseas profits into the US, because it is double taxed then; so it leaves all its overseas profits overseas. All very legitimate. And yet there has been a huge outcry and a Congressional hearing where Apple is accused of not paying "its fair share of taxes". Similar accusations are levied on Amazon, Google and Starbucks in the UK and indeed in many other countries. Nowhere are the authorities claiming they broke the law. They are just angry that these c...

So says Huawei. Really ?? No, not really. They are very interested in the US. Its just that they have realised that the doors to the US are simply shut for them. There has been a spat going on between the US politicians and Huawei for some time. It looks like the politicians have won.  And it begs the bigger question - can any company in the world be exclusively in one country or region (however big that might be) and hope to be a major player in the world. Huawei is a telecoms company. They sell networking equipment significantly cheaper than say Cisco. They used to be crappy ( Cisco would snigger at the mention of their name). Not any longer. Same quality, half the price. In an uncomplicated world, companies  should be falling over themselves to buy from them.  But then, the world is not an uncomplicated place. Huawei is a Chinese company. So what, you might ask ? Huawei's founder and leader was formerly in the Chinese army. Still so what ? Well, the ties with the Chine...

What does Ramamritham have against coffee ? I would have thought the caricature of Ramaritham included a cup of coffee and The Hindu. Yet here's this venerable gentleman having an angst against coffee . Why ? I am referring to IKEA's application to open retail stores across India. You may recall that the move to allow foreign owned retailers to set up shop in India is a recent one (Didi notwithstanding).  IKEA has been one of the first to submit their proposal, willing to bring it no less than Rs 10,000 crores of investment. You would have thought that they would be welcomed with open arms  - it is difficult to see boxed furniture being a threat to national sovereignty. But what they got was not a red carpet - instead they were treated with the full attention of Ramamritham. (in the guise of the Foreign Investment Promotion Board - FIPB) I am no fan of IKEA stores. If you've been to one, they are all predictably the same format. You are forced to walk along one km of windin...

Ahhh ! If only the world was as simple as 50 years ago. Global companies found it quite simple then to divide the world ; there were only three regions in the world - America, Europe and Rest of the World. If you were an American company, 70 % of your revenues came from America, 27% came from Europe (Oh god; we have to improve there) and 3% came from Rest of the World (where's that ?). If you were an European company, 70% came from Europe, 27% from America (the bloody Yanks) and 3% from Rest of the World (where's that ?) Quite simple.   Alas life has got a bit more complicated for global companies. How to cut the world ? A popular division is to split as America, Europe and Asia Pacific. That threw up a problem - what about Africa (where's that ?). So came EMEA - Europe Middle East and Africa. Right - President Americas, President EMEA and President APAC.   That threw up more problems - does it make sense to group France and Mali in the same group ? And Venezuela and...

Its time to change Andrew Lloyd Webber's famous song in Evita . There's no option, but to cry for Argentina. How else can you react to the awful move by Cristina Fernandez, Argentina's President, to nationalise YPF, two weeks ago ? YPF, Argentina's largest oil and gas company is 57% owned by Repsol, the Spanish oil giant. Ms Fernandez's grouse against Repsol is that it is not investing in increasing production in YPF. This is partly true, but the real reason why YPF is not expanding production is that her government has artificially kept petroleum product prices low . No company is going to invest for very little profit. So the good lady has decided to nationalise the company. No doubt, a pittance would be paid to Repsol, well below the market value of its shares in YPF. This is daylight robbery, of the kind Ramamritham (of Vodafone fame) would feel proud. Is this any way to treat your largest foreign investor ? Spain and the EU are up in arms and threatening a figh...

As is often the case, the seemingly trivial turns out to be a giant event. I suspect this is the case with Huawei's announcement , buried in the back pages of financial newspapers that it would no longer pursue new business in Iran. So what , you might ask.  Read on. One of the fundamental principles in China is the total separation of politics  & economics. It has one of the freest of capitalist systems (at least for Chinese) and one of the most controlled of political systems. In foreign affairs, China has diligently pursued a policy of complete non interference in political matters. Its policy in Africa is unique in history. It is rapidly colonising economically, but scrupulously keeping away from interference in local politics. It will do business with anybody - God, Archangel Gabriel, Satan, Devil whoever, as long as there is business to be done. Before you denounce it, consider that there is some merit in this approach - the Chinese say political matters are for the ...

Alas, Ramamritham is alive , well and strong and he rules upon all that he surveys (pun intended).  The Indian Government will announce today in parliament that it would open up the retail sector to foreign investment. No doubt the Left will organise some bandhs, yell at 10,000 decibels in the Lok Sabha, and then this law will be passed while the opposition will walk out en masse. Ostensibly, this is economic reform. Its a pathetic, 15cms of reform after a decade of nothing happening, but we'll reserve that criticism for another day. What has got my goat is Ramamritham's dirty footprint all across this move. Firstly foreign investment of 100% will be allowed in Single Brand Retail, but only 51% in multi brand retail. Therefore a Marks & Spencer store can be 100% foreign owned, but Carrefour can't. Even though they may both sell precisely the same things (M&S does sell a lot of food). Pray why ?? Secondly Ramamritham has excelled himself in drafting a series of condi...

Do you like Ben & Jerry's ice cream? Most probably a resounding yes.  But this post is not about its ice cream. Its about what it has done on Tuesday. What it did on Tuesday was to go to New York's Zuccotti Park where the Occupy Wall Street protesters are camped and dole out free ice cream to all of them. Nothing spectacular about that, except that it went on to publicly declare its support for the protesters. It also published a statement from its Board of Directors that the company has the deepest admiration for the protesters and is standing with them. You can read what the Board said here . Ben & Jerry's has long been a left leaning company promoting a variety of causes. Its founders Ben Cohen and Jerry Greenfield started the company with a clear social and sometimes political agenda. So should this latest action be surprising. Yes, because, Ben & Jerry's is no longer an independent company. It's a subsidiary of Unilever, a global multinational compa...

On June 16th, IBM turned 100. Yes, 100 years old. That is a colossal achievement by any standards. As with living beings, so with corporations - the primary motive, and a great achievement,  is survival. Time to bring out the cake and sing Happy Birthday. The company started life in 1911 as Computing Tabulating Recording Corporation, formed by a merger of three small companies. A decade or so later it changed its name to a more catchy International Business Machines, the name by which it is still known. And over the decades it has weathered many a storm, made many a significant achievement and today, even at a ripe old age, is strong, robust and dancing. That is has done so in the field of information technology, where the pace of change is far more rapid than in other sectors, adds a special gloss to the achievement. Look at the inventions it has to its credit. The punch clock to record time, the electric tabulating machine, the ATM, the floppy disk, the hard disk, the magnetic st...