In 2009, US food company Kraft Foods launched a hostile bid for Cadbury, the UK-listed chocolate maker. As became clear almost exactly two years later in August 2011, Cadbury was the final acquisition necessary to allow Kraft to be restructured and split into two companies: a grocery business worth approximately $16 billion and a $32 billion global snacks business. Kraft needed Cadbury to provide scale for the snacks business, especially in emerging markets such as India. The challenge for Kraft was how to buy Cadbury when it was not for sale. Kraft itself was the product of acquisitions that started in 1916 with the purchase of a Canadian cheese company. By the time of the offer for Cadbury, it was the world’s second-largest food conglomerate, with seven brands that each generated annual revenues of more than $1 billion.

Cadbury was founded by John Cadbury in 1824 in Birmingham, England and had grown through mergers and demergers. Ownership of the company was 49 per cent from the US, despite its UK listing and headquarters. Only 5 per cent of its shares were owned by short-term traders at the time of the Kraft bid. Not only was Cadbury not for sale, but also actively resisted the Kraft takeover. Cadbury’s own defence documents stated that shareholders should reject Kraft’s offer because the chocolate company would be absorbed into Kraft’s low growth conglomerate business model – an unappealing prospect that sharply contrasted with the Cadbury strategy of a pure confectionery company. A deal was eventually struck between the two chairmen on January 18 2010 at 840 pence per share plus a special 10 pence per share dividend. This was approved by 72 per cent of Cadbury shareholders two weeks later.

Welding together two organizations with disparate cultures has resulted in an exodus of former senior Cadbury executives, especially as the nexus of power has migrated from the UK to Kraft’s European headquarters in Zurich. The speed of the integration, allied to the fact that the hostile nature of the bid precluded due diligence, has made the process of integration more fraught. While the difference in size of the two companies indicates the enormity of the task of integration. Prior to the acquisition, Kraft was roughly four times the size of Cadbury, with an annual turnover in 2009 of about $40 billion. The difference in culture is proved difficult to integrate. Cadbury’s head office was a cohesive place, where staff could speak to Chairman Roger Carr and chief executive Todd Stitzer as they walked around. Kraft’s headquarters, by contrast, are a labyrinthine campus with satellite offices dotted beyond the campus. Kraft, under pressure to show results, scared off Cadbury employees by trying to make their decentralized culture fit the US company’s highly structured approach. Cadbury’s UK nerve centre was emasculated by the switch to Switzerland and to Kraft’s category-led model.

When Yasuchika Hasegawa took over as president of Takeda in 2003, the Japanese pharmaceutical company was experiencing sluggish domestic growth and facing a drop in revenue as lucrative patents expired. A fluent English speaker who had spent more than a decade working for the company in Germany and the US, Hasegawa was the first non-member of the Takeda family to run the business.

With foreign rivals invading the Japanese market, Takeda’s inward-looking management culture put its survival at risk in the increasingly global pharmaceutical industry. The only realistic path to growth was for it to become an international company. Amid a wave of defensive mergers among Japanese pharmaceutical companies, Hasegawa instead pursued five acquisitions in Europe and the US between 2005 and 2011. The aim was not only to fill in product and geographic gaps but also to accelerate a transformation that would make the corporate culture more outward-looking. The acquisitions brought change in four main areas:

• Relocation. Hasegawa relocated key business functions to other countries, most notably by transferring drug development to North America. He also set up a global advisory board that brought in foreign advisers from Pfizer, Eli Lilly and AstraZeneca. The idea of establishing dual headquarters was floated by Hasegawa; although there were no plans to bring this about, it sent a strong message about the company becoming less ‘Japancentric’.
• Senior management. Foreigners were appointed to senior positions to encourage a global mind-set. Takeda’s leadership committee now has seven non-Japanese executives, including the chief finance officer and the heads of human resources, global business development and pharmaceutical development. Symbolically, Hasegawa made English the working language (after a one-year transition phase) for meetings of both the leadership committee and the board.
• HR systems. Proficiency in English became mandatory for executive-level recruits. Special efforts were made to take on Japanese executives who had studied abroad and overseas recruits who were willing to relocate to Japan. These moves had a knock-on effect on executive compensation: the most glaring example was when a senior executive in the US was hired on a higher salary than the president, underlining the importance to the company of attracting the best candidates globally, regardless of nationality. To develop senior executives who could operate globally and to create new cross-border networks, Takeda set up a leadership programme for executives around the world. A personnel exchange initiative facilitated mutual understanding of executives’ different corporate cultures, while also exposing Japanese executives to businesses that were more dynamic and already acting as global organizations.
• Innovation. Hasegawa introduced an open innovation programme to promote collaboration with academics and biotech ventures around the world by giving researchers access to Takeda’s advanced research facilities, including its drug discovery technology. Although several important patents have expired, Takeda is now ranked 11th by sales among drug makers worldwide, up from 15th in 2003. Research and development spend has risen 260 per cent in the same period and Takeda now stands in seventh position for new drugs in development.