tailieunhanh - Lecture Corporate finance: A practical approach: Chapter 10 - CFA Institute

Chapter 10 - Mergers and acquisitions. The topics discussed in this chapter are: Mergers and acquisitions (M&A) are complex, involving many parties, mergers and acquisitions involve many issues and M&A analysis requires the application of valuation tools to evaluate the M&A decision. | Chapter 10 Mergers and Acquisitions Presenter’s name Presenter’s title dd Month yyyy 1 1. Introduction Mergers and acquisitions (M&A) are complex, involving many parties. Mergers and acquisitions involve many issues, including Corporate governance. Form of payment. Legal issues. Contractual issues. Regulatory approval. M&A analysis requires the application of valuation tools to evaluate the M&A decision. Copyright © 2013 CFA Institute 2 Pages 408–409 Introduction Mergers and acquisitions (M&A) are complex, involving many parties. Example Guidant Corporation (target) Johnson & Johnson (bidder—unsuccessful) Boston Scientific (bidder—successful) Note: Update on merger—Boston Scientific paid more than a half billion . dollars in 2011 for “improper conduct” by Guidant prior to the merger, with more potential additional claims by the IRS and Department of Justice (DOJ). Mergers and acquisitions involve many issues, including Corporate governance (., role of the board of directors). Form of payment (stock or cash). Legal and contractual issues (., takeover defenses). Regulatory approval (., competition). M&A analysis requires the application of valuation tools to evaluate the M&A decision: Bid and takeover premium. Distribution of gains between acquiring firm and target firm shareholders. 2 Example of a merger: AMR and . Airways Copyright © 2013 CFA Institute 3 LOS: Classify merger and acquisition (M&A) activities based on forms of integration and types of mergers. Example of a Merger: AMR and . Airways Issues: AMR, parent of American Airlines, filed for bankruptcy on 29 November 2011. AMR and its unions (pilots, flight attendants) grappled with labor agreements that would be suitable under a merged company (reached agreements December 2012 and January 2013). FTC made a “second request” for a review of the merger in March 2013 under the Hart-Scott-Rodino Act. Parties: AMR US Airways Regulatory authorities: Federal Trade Commission (FTC) DOJ . | Chapter 10 Mergers and Acquisitions Presenter’s name Presenter’s title dd Month yyyy 1 1. Introduction Mergers and acquisitions (M&A) are complex, involving many parties. Mergers and acquisitions involve many issues, including Corporate governance. Form of payment. Legal issues. Contractual issues. Regulatory approval. M&A analysis requires the application of valuation tools to evaluate the M&A decision. Copyright © 2013 CFA Institute 2 Pages 408–409 Introduction Mergers and acquisitions (M&A) are complex, involving many parties. Example Guidant Corporation (target) Johnson & Johnson (bidder—unsuccessful) Boston Scientific (bidder—successful) Note: Update on merger—Boston Scientific paid more than a half billion . dollars in 2011 for “improper conduct” by Guidant prior to the merger, with more potential additional claims by the IRS and Department of Justice (DOJ). Mergers and acquisitions involve many issues, including Corporate governance (., role of the board of .