COURSE TITLE

MERGERS & ACQUISITIONS

Course Objectives:

This course examines the subject of mergers and acquisitions on three levels:

To gain an understanding of the rationale for Mergers / Acquisitions / Takeovers /

Divesture and relevant mechanisms, processes and techniques.

The theory segment concentrates on questions concerning motivations for

mergers and empirical evidence related to those motivations.

The practice segment focuses on financial, strategic, legal, and regulatory

aspects of mergers, and addresses some mechanical aspects of mergers,
including accounting treatments and tax effects.

Finally, the course examines the controversy concerning financial, economic, and
societal benefits of mergers, as well as legal questions on their anti-trust effects.

Unit I Goal of the Firm: Introduction to Restructuring Problems:

Introduction to Restructuring Problems: The Strategic Management Process- Corporate
objectives in support of value creation- Mergers and Acquisitions motivations- Approaches to
study Mergers & Acquisition- Types of Mergers- Verticle, Horizantal, Conglomerative,
Concentric mergers.- Forms of Mergers and Acquisitions
Unit II Accounting & Valuation Issues: Corporate Valuation- Approaches to corporate
valuation- Valuing the Business Vs Valuing the company-Mergers & Acquisitions- Valuation
Methods- Net Assets method, Net payment Method, Lump-sum Method, Intrinsic Value
Method.- Accounting Treatment- Preparation of Consolidated Balance Sheet after merger/
acquisition.-.
Business valuation models- -Current cost Accounting model-- Economic Value model- Deprival
value model- Dividend valuation model- Price Earning ratio model- Tobins Q model- Free
cash flow valuation model-EVA model.
Unit-III Financial Practitioners: (CFOs/Auditors/Investment Bankers): External and
Internal Reconstruction- Process and Accounting Treatment-Exchange Ratio- Swap RatioRatio-Net Assets method- P/E Method- EPS & Synergy-Benchmarking of the PER- Walk way
price- Leveraged Buyouts- Megere & Acquisitions Competitive Advantage.
Essential Readings:

Weston, Sen and Johnson, (2003), Takeovers, Restructure and Corporate Governance, Prentice
Hall.

Bagbandas & Alok Kumar Pramanik, (2007), Mergers & Acquisitions, Indian Scenario, Kanishka
Publishersl

Machiraju,(2003) Mergers, Acquisitions and Takeover, New Age International.

Reed and Reed Lajorex (1999), The art of Mergers & Acquisitions, McGraw Hill, 1999.

Further Readings:

S Ramanujam, Mergers et al., Tata McGraw Hill, 2000.

Sridharan and Pandian, Guides to Takeover and Mergers, Wadhava Publications, 2002.

Peirick A. Gaughan, Mergers, Acquisitions and Corporate Restructuring, John Wiley & Sons,
2003.

Robert Brown, (2004), Applied Mergers and Acquisitions, John Wiley & Sons.

Bartlett, Sarah The Money Machine (KKR)

Burrough, Bryan Barbarians at the Gate"

Copeland, Koller, Murrin "Valuation"

Ernst & Young

Gaughan, Patrick Mergers, Acquisitions, & Restructuring

Hart, Peter Mergers

Levine, Sumner (1989) The Acquisitions Manual, (1989)

Marren, Joseph, "Mergers and Acquisitions: Will You Pay Too Much,"

Moore, Keith (1999) Risk Arbitrage: An Investors Guide, (Wiley)

Post, Alexander Anatomy of a Merger

Rappaport "Creating Shareholder Value"

Ravens craft, David & Scherer Mergers, Sell-Offs, and Economic Efficiency

Robinson, Bruce Strategic Acquisitions

Rock, Milton, (1994) et al. Mergers and Acquisitions Handbook, McGraw Hill

Salter & WeinholdDiversification Through Acquisition"

Steinberg, Marc Tender Offers

Stewart, James "Den of Thieves"

Wasserstein, Bruce Big Deal"

Weston, Chung, Siu "Mergers, Restructuring, & Corporate Governance,"

Web Sites: http://www.theonlineinvestor.com/mergers.phtml

Berle, A. and Means, G., The Modern Corporation and Private Property, New
Harcourt, Brace, and World, 1968 (originally published in 1932)

Fama, E. "Efficient Capital Markets: A Review of Theory and Empirical

Finance, May 1970, pages 383-417.

Ruback, R.S., "The Cities Service Takeover: A Case Study," Journal of Finance, XXXVIII
May 1983.

Ravens craft, (1987), "Mergers, Sell-Offs, & Economic Efficiency, Brookings Institution,
Washington, D.C., 1987

(1994) Mergers and Acquisitions, 1994

York:

Work," The Journal of

(2)

Websites:

www.Quickmba.com
http://www.riskglossary.com/
http://management.about.com/
http://highered.mcgraw-hill.com
www.investopedia.com

Journals:
FORTUNE.
Fortune India.
The Economist.
Capital Market.
Dalal Street.
Money Today.
Business Outlook.
The Management Accountant.
Chartered Financial Analyst
Journal of Financial Management

Teaching Learning Plan

Course

MERGERS &

ACQUISITIONS
Course
Code
Credits
No of
Sessions
Basic Text:
Faculty
Name:
Session No:
3

TRIMESTER

: III

02
20
Komal Ghosh, Mergers
and Acquisitions
U.Padmavathi
Unit-I
Activity CAP Weight
age
Topic: Goal of the Firm
Introduction to Restructuring
Problems:
Introduction to Restructuring
Problems:
The
Strategic
Management Process- Corporate
objectives in support of value
creationMergers
and
Acquisitions
motivationsApproaches to study Mergers &
Acquisition- Types of MergersVerticle,
Horizantal,
Conglomerative,
Concentric
mergers.- Forms of Mergers and
Acquisitions

Class
room
discussion
s.

Resource (if any)

Komal Ghosh,
Mergers and
Assessments Acquisitions
-4
S Ramanujam, Mergers et
al., Tata McGraw Hill, 2000.

Assessments.
Objective(s)

This
course
examines
the
subject
of
mergers and acquisitions on
three levels.

To gain an understanding of the

rationale
for
Mergers
/
Acquisitions / Takeovers /
Divesture
and
relevant
mechanisms, processes and
techniques.

14

Unit- II
Title: Accounting &
Valuation Issues:
Corporate Valuation- Approaches

Class
room
discussion

Komal Ghosh- Megers

& Acquisitions.
Jain & Narang-

to corporate valuation- Valuing

the Business Vs Valuing the
company-Mergers
&
Acquisitions- Valuation MethodsNet Assets method, Net payment
Method, Lump-sum Method,
Intrinsic
Value
Method.Accounting
TreatmentPreparation
of
Consolidated
Balance Sheet after merger/
acquisition.-.
Business valuation models- Current cost Accounting model-Economic Value model- Deprival
value model- Dividend valuation
model- Price Earning ratio modelTobins Q model- Free cash flow
valuation model. EVA model.
Mid term Assessment

Advanced Accountancy

s,
Solving
Problem s
&
Preparatio
n of
Returns
and

Assignme
nts

10
Objectives:
The practice segment
focuses on financial,
strategic, legal, and
regulatory aspects of
mergers, and addresses
some mechanical aspects of
mergers, including
accounting treatments and
tax effects.
08

Unit-IIITopic- Financial
Practitioners:(CFOs/Audito
rs/Investment Bankers)External
and
Internal
Reconstruction- Process and
Accounting Treatment.
Exchange RatioSwap RatioRatio-Net Assets method- P/E

Class
room
discussion
s,
Solving
Problem s
&
Preparatio
n of

Case studies-6 Komal Ghosh- Megers

& Acquisitions.
Jain & NarangAdvanced Accountancy

Method
Calculation of EPS & Synergy.
Benchmarking of the PER- Walk
way price Megere & Acquisitions
Competitive
AdvantageLeveraged Buyouts.
Case studies

Returns
and

Assignme
nts

Objective: The practice segment

focuses on financial, strategic, legal,
and regulatory aspects of mergers,
and addresses some mechanical
aspects of mergers, including
accounting treatments and tax
effects. the course examines the
controversy concerning financial,
economic, and societal benefits of
mergers, as well as legal questions
on their anti-trust effects.

CAP EVALUATION

INTERNAL
ASSESSMENT.No.
1
2
3

Mode of Evaluation
Case study Analysis & Presentations
Assignments
Midterm
CAP
External Exam
Total

Max.
Marks
6
4
10
20
30
50