Mergers & Acquisitions
Program : MBA
Credit : 3
Course Code : SL FI 604
Objective
The objective of this course is to help student in familiarizing with various aspects of mergers and acquisitions,
including their valuation.
REFERENCE BOOK
Mergers, Acquisitions and others Restructuring
Activities.
Mergers & Acquisitions
Mergers & Acquisitions
The Complete Guide to Mergers and
Acquisitions: Process Tools to Support M&A
Integration at Every Level, 2nd e
Five Frogs on A Log: A CEO's Field Guide to
Accelerating the Transition in Mergers,
Acquisitions, and Gut Wrenching Change, 1st e
Harvard business review on mergers and
acquisitions
Barbarians at The Gate: The Fall of RJR
Nabisco, 1st e
Mergers-What Can Go Wrong and How to
Prevent it, 1st e
Damodaran on Valuation, 2nd e
th
M&A and Corporate Restructuring, 4 e
Detailed Syllabus
Mergers and Acquisitions - 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 Buy-backs - Standstill
Agreements - Anti-Takeover Amendments - Proxy
Contests - Changes in Ownership Structures - Share
Repurchases - Exchange Offers - Leveraged Buy-out
- Going Private - Issue Raised by Restructuring -
History of Merger Movements.
Class of : 2011
Sessions : 33
PUBLICATION
Donald M. Depamphills – 5th edition- Elsevier
IUP
Weston, Fred. McGraw Hill - 2001
Galpin, Timothy J. / Herndon, Mark. Jossey-
Bass - 2007
Feldman, Mark L / Spratt, Michael Frederick.
New York: Harper Business - 1999
Boston: Harvard Business School Press - 2001
Burrough, Bryan / Helyar, John.
New York: Harper & Row; 1990. xvi, 528 p.,
32 p of plates ISBN: 0060161728. Collins
Business - 2008
Gaughan, Patrick A. Wiley Finance - 2005
Damodaran, Ashwath. John Wiley - 2006
Gaughan, Patrick A. Wiley - 2007
Mergers and Acquisitions: 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.
Principles of Valuation: Capital Budgeting
Definition and Measurement of Cash Flows - Capital
Budgeting Basis for Firm Valuation - Definitions for
Valuation Analysis - Application of Capital
Budgeting Basis to Four Period Case - Free Cash
Flow Basis for Valuation - The No-Growth Case -
Constant Growth - Supernormal Growth followed by
No Growth - Supernormal Growth followed by
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 - Operating Assets -
NOI Measure - Calculation of the Cost of Capital -
Cost of Equity - Capital Asset Pricing Model - Bond
Yield Plus Equity Risk Premium - Average Investor’s
Realized Yield - Dividend Growth Model - Cost of
Debt - Cost of Preferred Stock - The Marginal Cost of
Capital.
Methods of Payment: Effects of Method of Payment
Information Effects - Signaling - The Role of Junk
Bonds - Post Merger Financial Leverage.
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 and Managerialism -
Takeovers as a Solution to Agency Problems -
Managerialism - Hubris Hypothesis - The Free Cash
Flow Hypothesis - Statement of the Hypothesis -
Evidence on the FCFH - Market Power - Tax
Considerations - Carry-Over of Net Operating Losses
and Tax Credits - Stepped-Up Asset Basis -
Substitution of Capital Gains for Ordinary Income -
Other Tax Considerations - Value Increases by
Redistribution.
Sell-Offs and Divestitures: Definition and Examples
- Divestiture - Background on Divestitures -
Financial Effects of Divestitures - Analysis of
Divestitures Motives for Divestitures - Case
Illustrations of Spin-offs and Divestitures - Voluntary
Liquidations and Takeover Bust-ups.
Joint Ventures: Joint Ventures in Business Strategy
- Joint Ventures and Complex Learning - Tax
Aspects of Joint Ventures - International Joint
Ventures - Rationale for Joint Ventures - Reasons for
Failure - Joint Ventures and Anti-trust Policy
Divestment of Public Sector Undertakings and
Leveraged Buy-outs: General Economic and
Financial Factors - Illustration of an LBO - Elements
of a Typical LBO Operation -
ESOPs and MLPs: Nature and History of ESOPs -
Types of Pension Plans Use of ESOPs Master
Limited Partnerships
International Mergers and Acquisitions: The
Theory of the MNE - Reasons for International Trade
- Growth - Technology - External Advantages in
Differential Products - Government Policy -
Exchange Rates - Political and Economic Stability -
Differential Labor Costs, Productivity of Labor - To
Follow Clients - Diversification - Resources Poor
Domestic Economy.
Share Repurchase and Exchanges: The Nature of
Cash Share Repurchases - Cash Tender Offers to
Repurchase The Theories Behind Share Repurchase
Tax Aspects of Exchange Offers - Empirical
Evidence on Exchange Offers.
Corporate Control Mechanisms: Internal and
External Control Mechanisms - Inside versus Outside
Directors and CEO Turnover The Role of Majority
Shareholders Dual Class Recapitalization - Proxy
Contests
Takeover Defenses: Anti-Takeover Amendments -
Types of Anti- Takeover Amendment
Management Guides for Mergers and
Acquisitions: Diversification and Mergers in
Strategic Long Range Planning Framework - Merger
Analysis in a Value Creation Process.
Regulatory framework: Company law, cross border
, income tax and monopolies competition
commission.
Current Development
Cases
Faculty will be handling eight or more cases
Oracle's Acquisition of Peoplesoft
The Adidas - Reebok Merger
eBay's Acquisition of Skype: Will the 'Gamble'
Work?
HP-Compaq: A Failed Merger?
The Gucci - LVMH Battle
The Polaris - Orbitech Merger
Valuing Sify's Acquisition of Indiaworld
Holcim's Acquisitions in 2005
The Morgan Stanley - Dean Witter Merger
Disney's Acquisition of Pixar
News Corp in 2005: Consolidating The
DirecTV Acquisition
 Tata Tetley: Managing the Tetley Acquisition

AT&T in 2005: Merging With SBC

RightNow Technologies (Harvard Business

School Case)

Jet Airways' Attempted Acquisition of Air

Sahara

Source: Case Studies on Mergers & Acquisitions

Volume II

Suggested Schedule of Session

No. of
Topic
Sessions
Mergers and Acquisitions - Overview 1
Mergers and Acquisitions 2
Principles of Valuation 2
Increasing the Value of the Organization 2
Methods of Payment 2
Theories of Mergers 2
Sell-Offs and Divestitures 2
Joint Ventures 2
Divestment of Public Sector 2
Undertakings and Leveraged Buy-outs
ESOPs and MLPs 2
International Mergers and Acquisitions 2
Share Repurchase and Exchanges 2
Corporate Control Mechanisms 3
Takeover Defenses 2
Management Guides for Mergers and 2
Acquisitions
Takeover Models 1
Regulatory framework and Current 2
Development
Total 33