EXECUTIVE SUMMARY
Mergers and acquisitions are one of the popular topics in business today,
since they characterize the new economy: pressure of global competition,
development of technology and disappearance of country boundaries. The
purpose of this thesis is to study the valuation processes and approaches
in mergers and acquisitions by analyzing the Westpac Banking
Corporation/BT Funds Management case. Discounted Cash Flow and
Comparable Multiples approaches are emphasized in the valuation of the
companies.
Based on the valuation this report will identify the benefits for Westpac
acquiring BT Funds Management.
The report first introduces the general conditions of merging, in the Funds
Management industry recently and admits that there are some limitations
in the report because the merging is going on now and was hard to collect
comprehensive information.
Management Structure at Westpac Introduction
David Morgan, Chief Executive Officer In recent years crashing markets and a stalled
Philip Chronican, Chief Financial Officer economic recovery many financial institutions have
David Clarke, Group Executive, BT been involved in merging and/or acquiring companies
Financial Group to increase their market value. Recent examples of
Leon Davis, Chairman Mergers & Acquisitions in Australian financial
Phil Coffey, Group Executive, Westpac institutions are National Australia Bank acquiring MLC,
Institutional Bank Commonwealth Bank acquiring Colonial First State and
Westpac Banking Corporation over BT Funds
Management; Rothschild; and Hastings.
Synergistic value
PUT IN PIC FROM PG 13 BT Synergistic Value
ACQUISITION Based on the benefits, which may be derived from
putting the two businesses together, these might
related to:
Strategic Value
The strategic values are both advantageous for BT and
WBC. WBC has been quite keen on gaining competitive
advantage in the wealth and funds management
business. For BT, which has lost both reputation and
performance of its funds in the past two years. The
following are the main reasons according to CEO David
Morgan for the acquisition of BT Funds Management.
• Broaden customer relationships
• Improve wealth management position
• Drive operational efficiency
• Embed a high performance culture
• Build corporate reputation