South-Western - Management  
Corporate Crunch
Topic Internal Environment and Culture
Key Words merger, culture, brand identity
News Story

When Unilever acquired Ben & Jerry's in 2000 for $326 million, employees and loyal fans feared the unique ice cream maker would never be the same. However, five years later, the results show that the merger has been unique in that it has been a success for employees and shareholders alike.

According to researchers Mitchell Lee Marks and Phillip Mirvis, only about 15% of corporate mergers achieve their financial objectives, and about half result in severe culture clashes. Unilever's strategy has been to allow the Vermont company to maintain its distinct and eccentric culture, while focusing on improving its bottom line. At the time of the merger, Ben & Jerry's had $237 million in sales and earnings of $3.4 million. Under Unilever management, the company increased its global sales by 37%, tripled its operating margins, and expanded into 13 new countries.

Mirvis also says that in most mergers, the bigger company cuts costs, changes marketing plans, and affects personnel decisions, leaving the smaller company to feel as if the life has been taken out of their organization. By valuing the unique culture at Ben & Jerry's, Unilever was able to avoid many of the problems that usually follow mergers of this type.

Ben & Jerry's was founded in 1978 by Ben Cohen and Jerry Greenfield who set up shop in an old gas station. Their company became known as much for its high-calorie deserts as for its left-leaning activism. The company donated 7.5% of its pretax revenue to various causes, used environmentally friendly materials, and worked to create jobs in low-income areas. Surveys showed that employees had a great degree of passion for Ben & Jerry's social mission as well as its very "uncorporate" culture. However, the company lacked organization and structure.

Unilever showed its respect for the company's culture and its importance to the brand from the beginning. In 2000, when the merger was announced, they committed over a million dollars to charitable causes selected by Ben & Jerry's employees. They also made a $5 million one-time grant to the Ben & Jerry's Foundation. When the new CEO, Yves Coutette, was appointed, he put company mangers through an exercise of creating a "brand key," a standard procedure for Unilever employees. The team returned with a "Joy for the Belly and Soul" brand key illustrated by a diagram in the shape of an ice cream cone. Coutette organized leaders of the company's key areas into a committee and held a contest to name the committee, now called "Managers of Mission or "Mom" for short.

The two companies continue to learn from each other and benefit from the unique resources that each division brings to the table.

Questions
1.

Take a moment to visit Ben and Jerry's website and the Unilever website. List three adjectives that you would use to describe each website. In your opinion, do these adjectives define the culture of the company that the websites represent? Why do you think Unilever chose to leave Ben & Jerry's website separate from their own?

2.

According to the article, what did Unilever do that helped to make the merger such a success? What mistakes do big companies typically make in merger situations that lead to problems?

3.

Do some research in your textbook or online. Come to class prepared to discuss one company merger or acquisition that has happened in the last ten years. Was this particular merger successful or not successful? What was learned from the merger?

Source "Corporate Crunch," Workforce Management, April, 2005, pp.32-38.
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