Tesco PLC Acquisition – Creditbytes Institute

From Target to Close: Tesco PLC Acquisition

This curated platform guides you step-by-step through a case study of the acquisition of Tesco PLC.

Explore key resources to understand core M&A concepts — from Enterprise Value and Deal Structuring to Debt Capacity and Working Capital Optimization. You can Download each PDF directly on this page or visit the full post for deeper context and learning.

Downloaded Documents

Document	Description	Format
Adjusted Working Capital (AWC) Analysis	Understand how much capital is really tied up in day-to-day operations	PDF
D ebt Capacity Analysis	Learn how much debt a company can safely take on based on its cash flow.	PDF
DuPont Analysis	Break down ROE to see what drives a company’s returns.	PDF
Enterprise Value (EV) Analysis	See how companies are valued using EV and EBITDA multiples.	PDF

Acquisition of Tesco PLC Case Study Sequence

Step	Focus Area	Learning & Tasks	Purpose & Outcome
1	Understanding Tesco	Review Tesco’s background and historical growth Analyze Tesco’s core business segments, including retail formats (superstores, convenience, online) and geographic reach. Tesco’s financials and financial fundamentals to understand their current standing and performance.	Develop a thorough understanding of Tesco’s business model, strategic priorities, and operational footprint.
2	The Investors Behind the Bid	Identify the investor consortium, their backgrounds, and strategic motivations behind the bid. Explore the strategic rationale for targeting Tesco, including value creation levers and potential operational improvements. Consider the financial rationale underpinning the bid—how investor expectations shape bid pricing and risk appetite.	Understand the investor profile and motivations to better contextualize the deal proposal and incentives.
3	Mechanics of the Deal	M&A basics (based on the proposed bid) (Link to IB slides) Understand how Enterprise Value (EV) translates into what we actually pay (Equity Value)	Understand the financial mechanics that determine the deal’s monetary terms.
4	Shaping the Investment	Compare Tesco’s valuation multiples with those of similar supermarket peers to benchmark pricing. Evaluate how the proposed bid structure aligns with industry norms and underlying business fundamentals.	Develop an informed perspective on the bid’s financial viability and structural soundness.
5	Balancing Risk and Reward	Consider multiple deal alternatives and weigh their risk-return trade-offs. Formulate a reasoned final decision on the preferred deal structure based on analysis. Identify potential deal risks and safeguards embedded in the proposal.	Hone decision-making skills around complex investment trade-offs and risk management.
6	Reflections	Summarize two critical insights gained from evaluating the Tesco acquisition deal. Reflect on how your assessment of pricing and equity evolved through the exercise.	Consolidate learning and encourage independent critical thinking about deal dynamics.