At-A-Glance: Navigating M&A Cost Analysis in Grocery Retail
Grocery retail mergers present unique challenges in synergy evaluation, particularly when assessing complex supplier relationships and varied pricing structures across organizations. Pre-merger visibility into true costs is crucial for accurate synergy forecasting. The retailer chose PRGX for our True Net Cost (TNC) analysis and merger integration expertise to validate pre-merger assumptions and uncover hidden synergy opportunities across both organizations.
£31B
Combined Value
22,479
SKUs Evaluated
£675M
Supplier Funding
Challenge: Pre-Merger Synergy Validation for UK Grocery Giants
As two of the UK’s top three grocery retailers prepared for a historic merger, they faced critical challenges in understanding potential synergies. While teams from both organizations initially assumed supplier pricing would be harmonized, they needed detailed pre-announcement validation of TNC synergies, starting with the Food and Health and Beauty categories. This required comprehensive analysis of both direct costs and supplier funding across complex organizational structures.
Solution: Deep M&A Synergy Analysis through PRGX Margin Insight
The team implemented a three-phase approach with PRGX Margin Insight™ to unlock synergy insights:
Data Aggregation
Leveraged PRGX’s proven acquisition processes to acquire and validate data across 6 different systems and 80+ data tables.
Data Normalization
Applied Global Product Aggregation (GPA) methodology for precise vendor data cleansing, identifying exact and equivalent items across both organizations.
True Net Cost Analysis
Overlaid £675M in supplier funding data onto GPA, to understand the correct cost, price divergences, and synergy opportunities.
Results delivered:
- First Variance Category: £85.5M in potential synergies
- Second Variance Category: £186M in additional opportunities
- Total Variance – Identified Synergy Potential: £271.5M
Maximize Your M&A Value with PRGX Margin Insight
Planning a major retail merger? PRGX helps organizations validate and maximize synergy opportunities through detailed True Net Cost analysis. The PRGX Margin Insight solution provides the granular visibility needed for confident M&A decision-making. Connect with our experts today to discover how PRGX can help you identify and validate synergy opportunities across your merger landscape, or watch a demo to see our solutions in action.
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