The Quaker Oats Company

Quaker Oats acquired Snapple less than one year ago for $2 billion. Snapple’s sales were declining, calling into question the value of the $1.3 billion in goodwill Quaker Oats had recognized at the acquisition. Quaker Oats management needs to decide what to do in light of these recent events. Had Snapple acquisition been a mistake? How should communication with shareholders be handled? Should the goodwill be written off?