MBA 301: MERGERS AND ACQUISITIONS Aims of the Course The objectives of this course is to sensitize the students

s about the need for corporate restructuring of achieving fast growth and maximize shareholders value in the context of ever increasing competition thrown up by liberalization and globalization of Indian economy This will develop an understanding of the strategic acquisition and divestiture process The focus of this course however, will be analyzing these decisions from a financial perspective emphasizing valuation Course Delivery Overview Introduction, Forms of Corporate Restructuring, Expansion, Mergers and Acquisitions, Tender Offers, Joint Ventures, Sell Offs, Spin offs, Split offs, Split ups, Divestitures, Equity Carve-outs, Corporate Control, Premium Buybacks, Standstill Agreements, Proxy Contests, Changes in Ownership Structures, Share Repurchases, Exchange Offers, Leveraged Buyout, Going Private, Issue Raised by Restructuring, History of Merger Movements Types of Mergers Economic Rationale for Major Types of Mergers, Horizontal Mergers, Vertical Mergers, Conglomerate Mergers, Concentric Mergers, Framework for Analysis of Mergers, Organization Learning and Organization Capital, The Role of Industry Life Cycle, Product Life Cycle and Merger Types Theories of Mergers Efficiency Theories, Differential Efficiency, Inefficient Management, Operating Synergy, Pure Diversification, Financial Synergy, Strategic Realignment to Changing Environments, Undervaluation, Information and Signaling, Agency Problems , Takeovers as a Solution to Agency Problems , Hubris Hypothesis, The Free Cash Flow Hypothesis Takeover Defenses Anti Takeover Amendments Types of Anti Takeover Amendment Principles of Valuation Capital Budgeting Definition and Measurement of Cash Flows, Capital Budgeting Basis for Firm Valuation, Definitions for Valuation Analysis, Free Cash Flow Basis for Valuation, The No Growth Case, Constant Growth, Dividend Growth Valuation Model, Comparisons of Valuation Models Increasing the Value of the Organization Alternative Measures of Investment Rate, Total Capitalization, EBIT Measure, Calculation of the Cost of Capital, Cost of Equity Capital, Asset Pricing Model, Dividend Growth Model, Cost of Debt, Cost of Preferred Stock, Marginal Cost of Capital Regulatory framework Company law, cross border, income tax and monopolies competition Commission Integration Issues Impact assessment of mergers on companies, changes to human resource requirements in post-merger situation, layoffs and HR restructuring, marketing led M&A, post-merger changes in marketing methods and channels, combining and splitting of units Strategic Considerations Analyzing mergers and acquisitions from a long term strategy point of view, ex-ante view of merged entity, expost adjustment, strategy development for improved management of merged entity Indicative Reading

Weston J F Takeovers, Restructuring and Corporate Governance, Pearson Education, 2001

References Copeland T, Valuation, Measuring and Managing the Value of Companies, McKinsey & Company, John Wiley & Sons, 2000 Reed F S & Lazoux AR, The Art of Mergers & Acquisitions, Irwin Professional Publishing, 1996. Bhatia N L & Sampat Jagruti, Takeover Games, Taxmann Publishers, 2002. Weston J F & Waver Samuel C, Mergers & Acquisitions, Mc Graw Hill, 2001 Verma J C, Corporate Mergers, Amalgamations & Takeovers Bharat Publications, 1997 Course Learning Outcomes It is expected that after pursuing this course the students will be able to develop competencies in identifying opportunities/areas for mergers, demergers, amalgamations and takeovers etc. carrying out valuation involved therein, building up strategies for them and evaluating the post restructuring performance of the enterprise Assessment Methods Centralized university examination Class tests Case studies