FIN41480 Mergers & Acquisitions

Academic Year 2021/2022

Mergers and Acquisition is the seen as the sexy side of corporate finance. One of the best business narratives ever written is Barbarians at the Gate the story of how KKR took over RJRNabisco. As a topic, Mergers & Acquisitions integrates all of the business disciplines. Often thought of solely as a finance topic (witness the module code) this is the ultimate integrative topic. To successfully execute an M&A transaction requires an understanding of Finance (valuation & financing), Strategy (rationale), Project Management (execution), Leadership & Change Management (People) and Legal (Regulatory). You also have to be able to chunk information from the lowest level of detail to a C-suite presentation.

In our time together we can only scratch the surface of many of these topics. As you all have strong finance backgrounds we will cover the financial aspects of M&A and “hang” the other material on the financial hooks. As a finance expert you will be expected to value the target and the synergies that will be realised in the transaction. To do this effectively – you need to understand the rationale (strategy) for the transaction.

In addition to learning about M&A, you will be reacquainted with business strategy (which you probably did in your undergraduate days) and a little bit of project management.

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Curricular information is subject to change

Learning Outcomes:

• Understand the key principles driving corporations, of all sizes, seeking growth though mergers & acquisitions.
• Understand, the strategic imperatives behind M&A activity.
• Compare the differences between a "trade buyer" and a PE buyer.
• Articulate the rationale of mergers and acquisitions, and explore the specific valuation and strategic fit challenges faced by the entities in a transaction.

Indicative Module Content:

The topics we will cover:
• Finding Candidates
• Preliminary Negotiations
• Advisors
• Integration Planning
• The Target
• Valuation (we will expand on the book material)
• Negotiation
• Sale & Purchase Agreements
• Strategy

Student Effort Type Hours
Specified Learning Activities

75

Autonomous Student Learning

75

Lectures

22

Online Learning

15

Total

187

Requirements, Exclusions and Recommendations
Learning Recommendations:

You are expected to be familiar with Finance as a discipline. An understanding of management accounting would be useful (for estimating cash flows). Students undertaking one of the Finance MSc degrees will meet this recommendation.


Module Requisites and Incompatibles
Not applicable to this module.
 
Assessment Strategy  
Description Timing Open Book Exam Component Scale Must Pass Component % of Final Grade
Essay: Your final assignment is a 1,500 word (±10%) essay on a mergers & acquisition topic you have agreed with the lecturer. The paper should contain at least 3 references and a recommendation. Coursework (End of Trimester) n/a Graded Yes

45

Group Project: The group project is a presentation on a topic assigned to you by the lecturer. Varies over the Trimester n/a Graded No

40

Multiple Choice Questionnaire: Objective tests run as a Brightspace Quiz. This assessment is designed to test your recognition of the module comntent. The timing of the test will be advised in the module. Unspecified n/a Graded No

15


Carry forward of passed components
Yes
 
Remediation Type Remediation Timing
In-Module Resit Prior to relevant Programme Exam Board
Feedback Strategy/Strategies

• Feedback individually to students, post-assessment
• Group/class feedback, post-assessment

How will my Feedback be Delivered?

Feedback will be given on a group basis for group assignments. For individual assignments, individual feedback will be given. In line with academic regulations, no feedback will be given for the final assignment of the module. Grade feedback will not be given.

Main Text: Rankine & Howson (2013) Acquisition Essentials, FT Publishing

Supplemental Texts – Finance
Brealey, Myers & Allen (2020) Principles of Corporate Finance 13th ed., McGraw Hill (Chapter 33)
Koller, Goedhart & Wessels (2005) Valuation 4th ed., Wiley (Chapter 15)

For a more introductory treatment
Brealey, Myers & Marcus (2020) Fundamentals of Corporate Finance 10th ed., McGraw Hill (Chapter 21)
Watson & Head (2019) Corporate Finance Principles & Practice 8th ed. (Chapter 11)

Supplemental Texts –Strategy
Grant (2016) Contemporary Strategy Analysis 9th ed., Wiley (Part IV, esp. Chapter 15)
Grant & Jordan (2015) Foundations of Strategy 2nd ed., Wiley
Magrhetta (2013) What Management Is, Profile Books

Readings:
Christensen, Alton, Rising, Waldeck (2011) The New M&A Playbook, March, HBR
Coyne, Coyne & Coyne (2010) When You’ve Got to Cut Costs—Now, May, HBR
Cullinan, Le Roux & Weddigen (2002) When to Walk Away from a Deal, April, HBR
Kester & Luch (1995) Rehabilitating the Leveraged Buyout, May - June, HBR
Lee Marks, Mirvis, and Ashkenas (2017) Surviving M&A | How to thrive amid the turmoil, March-April, HBR
Martin (2016) M&A: The One Thing You Need to Get Right. June, HBR
Pozen (2007) If Private Equity Sized Up Your Business, Nov, HBR
Rogers, Holland & Haas (2002) Value Acceleration: Lessons from Private-Equity Masters, June, HBR
Summer
     
Lecture Offering 51 Week(s) - 39 Fri 10:00 - 11:30
Lecture Offering 51 Week(s) - 42 Fri 10:00 - 11:50
Lecture Offering 51 Week(s) - 42 Mon 10:00 - 12:50
Lecture Offering 51 Week(s) - 39 Thurs 10:00 - 12:50
Lecture Offering 51 Week(s) - 42 Thurs 10:00 - 13:50
Lecture Offering 51 Week(s) - 39 Tues 10:00 - 12:50
Lecture Offering 51 Week(s) - 42 Tues 10:00 - 12:50
Lecture Offering 51 Week(s) - 39 Wed 10:00 - 12:50
Lecture Offering 51 Week(s) - 42 Wed 10:00 - 12:50
Summer
     

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