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Faculty
Halil Kiymaz, Rollins College

Course Coordinator
ISUP Secretariat

Prerequisite/progression of the course

This course presumes that students have knowledge of basic accounting, economics, and financial management concepts and tools. Students should have had at least one course in accounting, finance and economics.

Course content, structure and teaching

This course explores mergers, acquisitions, and other corporate control transactions using limited background lectures, readings, case study analysis, and project work. This course will enhance your knowledge and maturity of judgment with respect to M&As decisions. The focus is on the mechanics of the transactions themselves, the valuation of the firms involved, the role of the various parties involved, and the causes and consequences of these activities. Because mergers and acquisitions represent significant changes that involve the entire enterprise the course pulls together material covered in previous finance courses and links financial decisions with the overall strategy of the firm.

The course's development of personal competences

To provide students with knowledge of:

1. What corporate restructuring is and why it occurs.
2. The impact of the regulatory environment on the M&As environment.
3. How value is created (or destroyed) as a result of corporate mergers, acquisitions, divestitures, spin-offs, etc., through in-depth analysis of how to "do a deal".
4. Commonly used takeover tactics and defences.
5. A process for selecting appropriate takeover tactics depending on the types of anti-takeover defenses in place at a target company.
6. The importance of understanding assumptions underlying business valuations.
7. A practical "planning-based approach" to managing the acquisition process.
8. Challanges associated with each phase of the M&A process from developing acquisition plans through post-closing integration.
9. The advantages and disadvantages of alternative deal structures.
10. How the various components of the deal-structuring process interact to determine price.
11. How to manage the deal-structuring process to minimize the risk that a business combination will not meet expectations.
12. Advantages and disadvantages of alternative ways to exit businesses.
13. Improvement on the following competencies:
    • Problem Solving
    • Critical Thinking
    • Active Learning
    • Work Ethic
    • Teamwork
    • Communication (written/oral)

Learning Objectives

WSJ/BW Article Discussion and Participation: I will be providing articles chosen from the WSJ for class discussioin. You are required to read each article and answer the questions at the end, if any. Your participation in class discussion is essential. Do not hesitate to ask any questions or voice your opinion regarding the articles or any other subject matter. In-class discussion will always be treated in a professional, non-threatening manner. In the absence of active participation, I will call on students. Active participation is defined to include both questions and comments.

M&A in Wine Country Simulation: In this simulation, you will be playing the role of the management team in one of the three wine producers: Starshine, Bel Vino, or International Beverage. Each group will evaluate merger and/or acquisition opportunities among the three companies and then determines reservation prices, values targets, and negotiates deal before deciding to accept (or reject) final offers.

"A Merger Story" Presentations: Each team will present a brief-story about a merger that has taken place in the last two years.

Teaching methods

Methodology: This course mostly consists of cases and discussions. However, I will be briefly lecturing to deliver the subject material for each chapter. Lectures will be conducted on the assumption that students have read and at least partially understood the assigned reading materials.

What You Might Expect: As a student in this class, you may expect a clear presentation of the subject, fair grading of your work, and treatment with courtesy and respect.

What is Expected of You: As your professor, I expect that you will (a) read the assigned readings and cases prior to coming to class, (b) attend class regularly, participate in class discussion, and ask questions to help to clarify points on which you are uncertain, and (c) recongnize that the most important determinants of your performance in the course are the time and effort you put in.

Examination

Final exam: 4-hour written exam (closed book). Question types may include multiple choice, T/F, problem solving and essays. Materials include text, lecture and assigned readings.

Exam aids: One page formula sheet and Excel.

Re-take exam: 24-hour written exam.

Recommended literature

Mergers, Acquisitions, and Other Restructuring Activities, Donald DePamphilis, 4th Edition, Academic Press Advance Finance Series

Course Pack:

• “Ten Ways to Create Shareholder Value” by Rappaport, HBR, September 2006.
• “Human Due Diligence” by Harding and Rouse, HBR, April 2007.
• “Making the Deal Real: How GE Capital Integrates Acquisitions” by Ashkenas, DeMonaco, and Francis, HBR, Jan.-Feb. 1998.
• “Are You Paying Too Much for that Acquisition” by Eccles, Lanes, and Wilson, Harvard Business Review, July-Aug. 1999, 136-145.
• “Merger Motives and Target Valuation: A Survey of Evidence from CFOs” by Muhkerjee, Kiymaz, and Kent, Journal of Applied Finance, Fall 2004.
• “Note on Valuing Private Businesses”, Harvard Business School Publishing, April 2001, #9-201-060.
• “Stock or Cash? The Trade-offs for Buyers and Sellers in M&As” by Rappaport and Sirower, Harvard Business Review, Nov.-Dec. 1999, 147-158.
• “Accounting and Business Combinations: Purchase Method” by Hawkin and Martinez-Jerez, Harvard Business School Publishing, September 2004, # 9-104-074.
• Making Smart Acquisitions (HBR Article Collection)
• Jeffrey H. Dyer; Prashant Kale; Harbir Singh; Dan Lovallo; Patrick Viguerie; Robert
• Uhlaner; John Horn; Geoffrey Cullinan; Jean-Marc Le Roux; Rolf-Magnus Weddigen

Last updated by ISUP Secretariat 29/01/2010