Transforming Southcorp Ltd (B)

Published 12 Jan 2004
Reference 5224
Region Other Regions
Summary

Case Writers: Jacob COHEN, David F. HAWKINS and Shira COHEN In 2001, Southcorp was in the midst of a major change of strategy. The shift involved becoming a pure play company in the wine industry. Prior to this decision Southcorp was a conglomerate which operated in three different lines of business. To strengthen its position in the wine industry the company also opted to make the acquisition of a well-regarded Australian wine brand. The case series addresses the issues the company faced in the transformation that was not very successful. The case series provides an opportunity to analyse such issues as strategy, accounting for restructuring, divestitures, mergers and acquisitions, and valuation.

Teaching objectives

The “Transforming Southcorp Ltd.” case series was written with the main objective of illustrating the link between a firm’s corporate strategy and the impact on its financial statements. This impact shows up throughout the case series from Southcorp’s initial strategy design to its execution. In this context there is an opportunity to discuss strategy analysis, accounting analysis, financial analysis and basic valuation techniques. Each of the four cases attempts to illustrate different issues, but in all of them it is important to draw a clear link between the company’s stated strategy and its financial statements.

Keywords
  • RD0105
  • RD0904
  • AR2004
  • AR0405
  • FINANCIAL ACCOUNTING
  • STRATEGY
  • VALUATION
  • BRANDS
  • MERGER and ACQUISITIONS
  • RESTRUCTURING
  • FAMILY OWNED BUSINESS
  • ASSET IMPAIRMENT