Inbuss Highlights

"My stint at Infinity has brought out various facets of my personality that were previously unknown to me. So, appears that I'm ripe for Citius, Altius, Fortius!!” - Suruchi Berry, Batch of 2007

Mergers & Acquisitions

Contact Hours : 30 hrs
Credit : 1 Credit
Prerequisite : Financial Management-II
Instructor : Nitender Dhillon

 

Merger and Acquisitions (M&A) have become a significant form of corporate restructuring. Buy backs, Spin offs, open offers and divestments are the order of the day as organizations look at M&A, strategic alliances and joint ventures for renewal and reorganization of their strategies in the rapidly changing competitive and regulatory environment. A large percentage of Foreign Direct Investment in India has been through the M&A route. Likewise Indian companies are increasingly acquiring businesses abroad as they integrate with the global economy. The number of deals and the value of these deals has gone up. Are these activities adding value to the consumer, the shareholder and other stakeholders? The skills required today involve a keen understanding of the dynamics of the industry, structuring the deal, to the post merger handling of the integration process.

 

COURSE DELIVERABLES
The course will improve upon your ability to
•    Understand the various forms and reasons of restructuring such as mergers, takeover, demergers, LBO, MBO, JVs etc.
•    target, value, select and manage the post merger process
•    understand the legal, competitive, regulatory and accounting issues when M&A in its different forms is used as a route
•    understand the broader societal issues in M&A

 

EVALUATION CRITERIA AND WEIGHTAGE
Quiz on case as well as concepts and techniques at least 4 have to be attempted to be eligible for ET; no make up Quiz    25%
End Term Exam    50%
Project Presentation and Written Reports (Going Live: Group Size 5-6)    25%

 

INSTRUCTOR: N.DHILLON      This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Takeover, Restructuring and Corporate Governance (WMM) by J F Weston, M L Mitchell and J H Mulherin, Pearson Education 4 th edition 2004 is the prescribed text for the course.

 

Additional Readings
1.    SEBI Take over code visit SEBI website http://www.sebi.gov.in/; M&A compendium, Bombay Chartered Accountant Society; M&A Critique
2.    G. Hamel, Y. Doz & CK Prahalad, "Collaborate With Your Competitors --‐ And Win", Harvard Business Review, 67, 1, 1989, pp. 133--‐139
3.    Journal: Long Range Planning
4.    Takeovers, Restructuring and Corporate Governance, 3 rd edn by Weston, Siu and B A Johnson, Pearson,  Education
5.    Barbarians at the Gate: by Bryan Burrough and John Helyar; Big Deal: Merger and Acquisitions in the Digital Age by Bruce Wasserstein

 

COURSE CONTENT AND CLASS SCHEDULE

 

#

Topic

Session Objectives

Pedagogy

Ch. Readings

1-2

Introduction to Mergers and

Acquisitions

  • An overview of the M&A process
  • A review of the key issues, players and dynamics
  • Management Group and KKRs operating strategy

Movie: Barbarians at

The Gate

HBR 1992: Crime? Greed? Big Ideas? What were the ‘80s about? By William Taylor

3-6

Valuation process

  • Different methods of valuation
  • Metrics and valuation of synergies
  • Estimates of growth variables & factoring in growth assumptions in the valuation process
  • LBO valuation using IRR, CAPM and FCF
  • Valuing high Risk investments and synergies

Case: Exxon-Mobil

Quiz 1:

WMM: Ch 9,10

7-10

Financing of

Acquisition

  • Cash  vs Equity vs Preferred vs Debt
  • Swap ratios and cash buyouts
  • Junk Bond Market
  • All Stock Deals

Case: Exxon

Mobil Exercise

Sheet

Quiz 2:

WMM: Ch 13, 16, 18

11-12

Take over defenses

  • Friendly vs hostile takeover
  • Takeover defenses

Quiz 3:

WMM: Ch 19

13-14

Competitive and Legal Aspects of

M&A

  • SEBI rules on M&A
  • Competitive Law and Regulatory Challenges
  • Corporate Governance Challenges

Quiz 4

www.sebi.gov.in

15-16

Accounting issues in M & A

  • Amalgamation in the nature of purchase
  • Amalgamation in the nature of merger
  • Pooling and Purchase methods for amalgamation accounting
  • Inter company owing and holdings

Quiz 5

WMM: Ch 3

17-18

Going Live

RIL & LyondellBasell

Group 1-2‐3

www.RIL.com

www.lyondellbase

ll.com

19-20

Going Live

Airtel & MTN

Group 4-5-6

www.airtel.com

www.mtn.com

21-22

Going Live

Berkshire Hathaway & BNSF

Group 7-8-9

www.berkshirehat

haway.com

www.bnsf.com

 
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