Introduction to Mergers and Acquisitions

Name: Introduction to Mergers and Acquisitions
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Mergers and Acquisitions happen when two or more organizations merge their operations

Created byManagement Study Guide

Last updated 9/2019

English

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What you'll learn

Understanding Mergers and Acquisitions (M&A)
M&A Strategies
The takeover process
Due diligence
Valuation
Structuring a takeover deal
The regulation of Mergers and Acquisitions
Hostile bids and defense tactics
Demergers and divestments
Accounting issues
Post closing challenges
Alternatives to Mergers and Acquisitions

Course content

1 section • 13 lectures • 1h 8m total length

Introduction4:04
Explore mergers and acquisitions, from takeover processes and due diligence to valuation, deal structuring, regulation, hostile bids, divestments, post closing challenges, and strategic alternatives.
Understanding Mergers and Acquisitions (M&A)5:58
Understand mergers and acquisitions, including acquisitions, full and partial, and the role of joint ventures, with growth, defensive, and financial motivations driving deals.
M&A Strategies6:41
Explore strategic approaches to mergers and acquisitions, align objectives with growth through market penetration, diversification, and vertical integration, and evaluate synergies and risks in overseas deals.
The takeover process5:30
Navigate the takeover process with advisers and investment banks, screen candidates, assess value and synergies, and negotiate a bid while arranging finance and due diligence.
Due diligence4:34
Explain the due diligence process in mergers and acquisitions, including conditions for unlisted targets, the offer process, and the role of warranties and indemnities in risk allocation.
Valuation9:52
Explore valuation methods for mergers and acquisitions, including discounted cash flow, asset value, breakup value, and price-earnings ratios, and analyze bid premium, target company value, and current market capitalization.
Structuring a takeover deal4:27
Explore structuring a takeover deal by choosing asset or stock purchases, the form of purchase consideration, and financing, with attention to contingent liabilities, tax implications, and earnings per share impact.
The regulation of Mergers and Acquisitions2:10
Examine how mergers and acquisitions are regulated to protect public interest and market efficiency, including tender offers under the US Williams Act, UK oversight, and EU merger rules.
Hostile bids and defense tactics4:00
Explore hostile bids and defense tactics, detailing aggressive, defensive, and negotiated acquisitions, with defenses like white knight, poison pill, disposal of assets, fat man defense, sketchily defense, and golden parachute.
Demergers and divestments1:07
Demergers and divestments split a company into independent units to focus on core businesses and unlock value by allowing investors to value each demerged business separately.
Accounting issues1:33
Compare merger accounting and acquisition accounting, detailing their effects on reserves in the consolidated balance sheet and how purchased goodwill is valued with cost and fair value considerations.
Post closing challenges8:08
Navigate closing challenges by evaluating staffing, guiding the transition team, and aligning culture, customers, and vendors to ensure smooth post-merger integration and legal compliance.
Alternatives to Mergers and Acquisitions10:02
Explore alternatives to mergers and acquisitions, including joint ventures, strategic alliances, franchising, licensing, and distributorships, and learn how capital contributions, governance, and performance benchmarks shape these arrangements.

Requirements

No prior knowledge is required.

Description

This course explains in detail the importance of Mergers and Acquisitions between two corporates. It also explains how it will impact the particular sector or industry and what are the pros and cons. Mergers and Acquisitions happen when two or more organizations merge their operations either partially or completely together

Acquisition in a broad sense means the takeover of one company by another, when the businesses of both the companies are brought together as one. In a narrow sense, it is the coming together of two companies which are equal in size.

The two largest UK Pharmaceutical companies, viz. Glaxo Wellcome and Smith Kline Beecham planned to merge their business operations in January 1998. This deal was worth more than £100 billion, but was abandoned at a later stage. If it had succeeded, it would have created the biggest drug manufacturing company in the UK as well as the third biggest organization in the world.

The move followed a number of mergers in the industry over a period of 5 years before this happened, which were largely driven by opportunities for cutting costs by way of merging their individual research and development facilities.

In full acquisition, the entire share capital is purchased by the acquirer. In partial acquisition, only a part of the share capital, i.e., more than 10% but less than 50% is obtained by the acquirer. A joint venture is a type of partnership business where two or more organizations invest cash or assets in a particular project or business. The partners or the people who invest can form a separate company for this purpose according to their investment ratio.

Who this course is for:

Management Personnel
Company Secretary
Chartered Accountants
Students
Traders and Investors