Most mergers are driven by the notion, sometimes wildly mistaken, that the combination will bring both a competitive advantage. Some pairs of companies, however, seem so intuitively right for one another, no bottom-line considerations should be allowed to interfere with their matrimony. Like a raisin and an infant's nose, these two seem made for one another.Every company that enters a market would be well advised to have an exit strategy (eh, Mr. Bush?). Kellogg Co. (NYSE: K) entered the fiber business over 100 years ago, and has made its fortune helping the American public by offering an exit strategy for its food intake.
So, in the interest of integrating businesses, I thought a natural partner for Kellogg might be Orchids Paper Products (AMEX: TIS), maker of bulk toilet paper, a product sure to help the combined company's bottom line.
After all, both depend on fiber for their success. Since one is "import" oriented, the other focused on the "export" business, their combined forces have great cross-marketing potential. For example -- how about a roll of toilet paper in every box of All-Bran? Given the boomer population's advancing age, the market for these products should be outstanding.
Kellogg and Orchids Paper Products -- a regular powerhouse to keep the American public's supply chain flowing unimpeded.
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