International Strategic Investments: A Study of Considerations Associated with Royal Unibrew’s Expansion into Spain

Jonas Møller Sørensen & Kasper Friis Martinsen

Student thesis: Master thesis


International investments have become a major part of operating a multinational enterprise (MNE), since such investments come in many forms. Investment in the form of international expansion is of special interest to this thesis. The thesis is focusing around a potential international expansion of Royal Unibrew into Spain, where the question of entry strategy is covered. In order to investigate this, a macro economical analysis of Spain is performed, along with an analysis of the competitiveness within the beer industry and with special focus on the beer industry in Spain. An internal analysis is performed as well to provide an insight into the resources of Royal Unibrew. The analysis shows various ownership advantages, location advantages and internationalization advantages, which ultimately lead to foreign direct investment (FDI) in the form of merger and acquisition being the optimal entry strategy. This leads to a due diligence process, in order to find the best possible candidates for such an international acquisition. After a comprehensive search process, the total number of candidates at 795 is limited to 551. A selection process with certain screening criteria narrows the data sample down to eight potential candidates. Based on the eight candidates a two-level evaluation hierarchy is created using an analytic hierarchy process (AHP) with roots in multi criteria decision making (MCDM), where the first level of the hierarchy includes four aspects and the second level includes nine different criteria. By using certain intensity of importance between each aspect and criterion, comparison matrices are calculated to determine the weights of the aspects and criteria. These are assessed both subjectively and objectively and determine the final ranking of the candidates. This way, by taking the importance of each aspect and criteria into account, the top ranking candidates for an international acquisition by Royal Unibrew are the Spanish breweries Font Salem, S.L. followed by Hijos de Rivera, S.A. and Estrella de Levante Fabrica de Cerverza, S.A. A discussion of methods and further action points for Royal Unibrew are finally discussed, as the results of this thesis should not determine which candidate to use for an expansion, but be the foundation for a more extensive research of the top ranked candidates.

EducationsMSc in Finance and Investments, (Graduate Programme) Final Thesis
Publication date2018
Number of pages182