Ivey Publishing

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Toyota Tsusho Corporation: Acquiring The French CFAO To Penetrate African Markets (Simplified Chinese Version)
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14 pages (7 pages of text)
Product Type:
Case (Pub Mat)
In 2016, the Japanese company Toyota Tsusho Corporation (TTC) acquired the remaining shares of the French trading company Compagnie Française de l’Afrique Occidentale (CFAO), which was operating in Africa. That same year, TTC registered its first financial loss in 16 years. Several years earlier, in 2012, TTC had participated in CFAO’s equity as its majority shareholder. These strategic moves were all part of TTC’s corporate campaign Vision 2015, "Lead the Next", which aimed specifically to reduce its dependence on its parent group by diversifying to increase earnings from non-automotive businesses, rather than targeting African markets as a long-term sustainability plan. What were the motivations of TTC and CFAO in pursuing these transactions? Was the positive performance that followed the acquisition a result of synergies or just a simple sum of the consolidation and an industry trend? Why did TTC move from preserving CFAO’s operational autonomy in 2012 to delisting and fully internalizing it in 2016? Was there a link between poor performance in 2016 and the acquisition of CFAO? How should CFAO solve the conflict between its existing automotive customers and the Toyota Group as its main rival? How could CFAO defend its leader position from the entry of major competitors from South Korea, India, and China? Although the Vision 2015 campaign was validated, should TTC revise its global vision strategy and 10-year plan in the future, given its bad year in 2016?
Learning Objective:
The case is intended for senior undergraduate and graduate-level business school students in courses that cover the following topics: mergers, acquisitions, and restructuring strategies; international market entry strategies; global business strategies; Japanese business management; and doing business in emerging African markets. After completing this case, students will be able to accomplish the following objectives:
  • Understand the rationale for corporate acquisition and restructuring, and evaluate synergistic potentials between the acquirer and the target.
  • Understand the pros and cons of pursuing different paths in corporate acquisition and restructuring.
  • Understand the appropriate approach to post-acquisition integration and performance consequences.
  • Understand how to manage conflicting interests among stakeholders during post-acquisition integration.
  • Understand how the early mover could defend its leadership position in emerging markets, when facing new entrants and continued uncertain macro environments.
  • Understand the successful strategies in emerging markets, where poverty and political instability remain prevalent but the political environment is improving and the upper and middle classes are rising.
  • Understand the unique business model of Japanese general trading companies (or sōgō shōsha).
Entrepreneurship,  General Management/Strategy,  International
Japan; France; Africa, Large, 2016
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Associated Materials
Translations: English (15 pages)
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