Wine Distribution Merger Two of UK's larger wine distribution companies, Bibendum and PLB, merged their businesses in October 2014 . Bibendum is primarily a restaurant supplier while PLB focuses on supplying wines to retailers. Does this suggest a mechanism through which the merger might create value?
The merged firm could eke out some economies of scope from selling to the two customer types. There may or may not be synergies in marketing or delivering wines. However, many of the two customer types purchase the same wines. There are likely to be economies of scale in warehousing, storing and, perhaps, purchasing any specific wine label. These scale economies make serving the two markets less costly.
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