Woolworths - proposed acquisition

EXECUTIVE SUMMARY
This report is aimed at providing an overview of the potential implications of Woolworths acquiring either Kmart or Target, and an overall consensus on whether this opportunity would be consistent with Woolworths investment and operating philosophy. The report suggests the benefits of undertaking an acquisition would significantly outweigh the costs. If Woolworths were to acquire Kmart or Target, this would significantly reduce the intense price competition currently affecting Big W, and would also enable Woolworths to continue in its pattern for sustained growth, and obtain a substantial share in the general merchandising market. A cost benefit analysis indicates that due to the similarities between Kmart and Big Ws product lines and operating philosophy, that Kmart is the most suitable takeover candidate.
BACKGROUND
Woolworths is currently in a position to undertake further acquisition activity in the marketplace. The company has consistently maintained its focu...