Course Syllabus

Course Year,
Mergers and Acquisitions 2020-21, Spring
Name: Term:

Course Instructor
RSM 2309 RT 464
Code: Office:

Instructor Instructor
Professor Andrey Golubov Open door (email me for specific time)
Name: Office Hrs:

Instructor Instructor
416-946-8427 andrey.golubov@rotman.utoronto.ca
Phone: email:

TA TA
Michelle Jennett jennett.michelle@gmail.com
name(s): email(s):

Delivery Mode
SYNCHRONOUS

Course Description
The objective of the course is to provide an understanding of the drivers of value creation/destruction in
mergers and acquisitions (M&A) and to develop skills in the design, evaluation, and negotiation of these
transactions. Familiarity with M&A is a foundation for effective work in a wide range of fields including
investment banking, private equity, consulting, corporate development, and advising senior management.

The focus of the course will be primarily on analyzing M&A deals from the perspective of a financial
advisor, integrating issues from economics, accounting, law, strategy, and organizational behavior where
appropriate. Successful financial advisors not only evaluate individual transactions, but also offer
guidance on capital market conditions and developments. Accordingly, we will examine past and current
trends in capital markets, the motivation and comparative advantage of different players in these markets,
and factors that can influence capital market trends. In addition, the course will bring in the perspectives
on M&A deals of other key players, such as stock market participants, regulators, corporate insiders,
shareholders, creditors, and other stakeholders.

The class sequence roughly follows the timeline of a deal and related activities. We will start with the
review of the current state of the M&A market and recent trends, followed by a discussion of the role of
takeovers in corporate finance and corporate governance. We will then move on to the analysis of value
creation in M&A and apply standard and M&A-specific valuation tools to evaluate acquisition deals and
the associated synergies. This is followed by a discussion of how M&A strategies interact with firms’
financing policies and how payment methods are chosen. We will also discuss various differences
between financial (PE) buyers and strategic (trade) buyers. Moving on to deal structuring, we will discuss
contractual features of merger agreements and legal aspects of M&A deals. We will then address the
more specialized issues such as the role of various regulations and merger arbitrage. Finally, we will

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RSM 2309 Mergers and Acquisitions - 2020-21 Spring, Professor Andrey Golubov

explore organizational restructuring (break-ups, spin-offs, split-offs, carve-outs). You will then have an
opportunity to apply your newly acquired skills in a live takeover simulation exercise designed to be both
a learning tool and one of the assessment points (see below).

The course is designed to be time-consuming and challenging. For virtually every session, I will assign a
case and may provide required background readings and supplementary material. Unless you have time
to prepare one case a week and do the background readings, I recommend not taking the course.

The class will be conducted in large part as a case discussion. This means that you will be asked to
consider yourself as a protagonist in the case (or an investor in a target or acquiring firm). We will consider
the study questions and other questions that pertain to the material in the case. I expect that all students
will have read the case before class and have prepared answers to the study questions. I will ask for
volunteers and cold-call on students to generate class discussion. The suggested readings should help
you analyze the cases, but should not necessarily be cited in the class discussion. You should argue as
if you are in a board meeting.

Course Learning Outcomes

By the end of this course, the student will be able to:
1. Identify the sources of value improvements and synergies in M&A and related transactions
2. Evaluate deal opportunities and estimate stand-alone firm values and associated synergies
3. Assess the impact of payment methods and financing sources on the post-deal organization
4. Recognize the role of deal terms and contractual features in designing M&A transactions
5. Compare various legal forms of transactions and how they may differ across countries
6. Assess the (often conflicting) objectives of various parties affected by M&A deals
7. Appreciate the broader role of M&A transactions in the economy

Course Grade Components

The final course grade reflects your level of demonstrated achievement of the Course Learning Outcomes
listed above. Various deliverables provide feedback on your progress towards the course grade. For each
individual deliverable during the course, you will receive a numerical “raw score”. These raw scores do
not correspond directly to letter grades or percentage scores. At the end of the course, the raw scores
will be weighted as shown in the syllabus to compute the overall course score. This overall score is then
converted by the instructor to the letter grade that reflects your performance in the entire course.

For situations in which students are not granted an academic accommodation for a missed or late
deliverable, the missed or late deliverable will not be accepted. Deliverables that are to be submitted in
class are due at the beginning of class unless otherwise noted.

Your overall grade will be based on 4 main components, some group and some individual.

1. Class Participation (20% of your overall grade). I expect you to come to every class, to be on
time, to be prepared, and to actively engage with the material. See below for further details on my
expectations regarding class participation. If this percentage of your grade sounds like a lot,

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remember that, when you leave Rotman, your ‘grade’ is based almost entirely on how well you
communicate your ideas and analysis to your colleagues. This course is a low-risk opportunity for
you to improve your presentation and communication skills.

2. Case Write-Ups (20% of your overall grade). For each case, I will ask you to prepare a two-page
group write-up, due Tuesday 3pm before the associated class. The case write-ups are two-page
memoranda of analysis and recommendations based on the study questions. The two-page limit
is for text only. You may attach as many appendices (e.g., numerical calculations) as you wish.
This should be done in groups of 4 students. The idea is that, by preparing for case discussions
in groups, you will learn from each other, tapping into the different backgrounds and expertise of
your group members. I will accept one write-up from the group and count it for credit for all
students involved in the group. Write-ups will not be accepted after the relevant class.

3. Midterm test (35% of your overall grade). There will be a midterm test during Week 9 of the course,
to be held in-class. The test can include multiple-choice questions, numerical exercises, short
answer questions, a mini-case or similar.

4. Takeover Simulation (25% of your overall grade). This exercise requires you to integrate lessons
from the entire course, developing and testing your ability to evaluate and negotiate a deal. The
simulation will be played in groups of 4. It is described further below. You will be required to submit
a group report on your activity and lessons learned, due just prior to the last class of the course
(20%). The extent of each group member’s contribution to this group activity will be peer-assessed
by every other group member (5%).

Item Wt % Due Date /Time Delivery Turnitin

Class Participation 20% Ongoing Class ☐

Case Write-ups (group) 20% Tue. 3pm prior to each class Quercus 

Midterm Test 35% Week 9, in-class Quercus ☐

Takeover Simulation – Week 12, prior to last class Quercus 

20%
group report

Takeover Simulation – Week 12, prior to last class Quercus ☐

peer assessment of 5%
individual contribution

Deliverables Descriptions
Takeover Simulation

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RSM 2309 Mergers and Acquisitions - 2020-21 Spring, Professor Andrey Golubov

An important component of the course is a takeover simulation exercise. The exercise involves student
groups playing the roles of two sides of a potential takeover transaction. You will be provided with
preparatory information during Week 10.

Your tasks in this group exercise will be to:

 In preparation for the live in-class simulation, evaluate the information provided to you and
conduct preliminary analysis that will guide your actions during the live session. You will need to
keep notes of what you did and why, to be reflected upon in your final report.
 During the live in-class simulation (Week 11), you will play against the other side of the deal. You
will have a chance to request additional information to further guide your decision-making, revise
your analysis, and attempt to negotiate a transaction that achieves your objectives.
 After the live simulation, you will be required to submit a report about the entire exercise. You will
need to explain your analysis and your actions, provide your justification for the choices you made,
and reflect on the challenges you faced and lessons learned. Further instructions on the content
and format of the report will be provided.

There will be a debrief session in the final session of the course, to allow for key learnings and takeaways
from the simulation to be discussed and reinforced.

Due date: April 6, 3pm

Submit an electronic copy via Quercus and provide your peer assessment of group members’
contributions.

Readings and Materials

Item Title Required? Location

Coursepack Course packet of case studies and readings Required Online, link below

Textbook Joshua Rosenbaum and Joshua Pearl, Optional Other

Investment Banking: Valuation, LBOs, M&A,
and IPOs, 3rd edition, Wiley, 2020

The required course materials are found in the electronic course packet of case studies and
supplementary spreadsheets, notes, and readings. You can purchase your section-specific course
packet here:

Section 102 (Wed 11.30am) – https://hbsp.harvard.edu/import/794591

Section 104 (Tue 4.00pm) – https://hbsp.harvard.edu/import/794587
Section 107 (Wed 7.00am) – https://hbsp.harvard.edu/import/794592

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RSM 2309 Mergers and Acquisitions - 2020-21 Spring, Professor Andrey Golubov

I also recommend the following textbook for a solid review of valuation techniques such as DCF and
multiples in the context of M&A and buyouts, as well as for some institutional details:

Joshua Rosenbaum and Joshua Pearl, Investment Banking: Valuation, LBOs, M&A, and IPOs, 3rd edition,
Wiley, 2020

There may be occasional extra readings that you will be able to access from Quercus.

If you are interested, you may wish to consult more comprehensive treatments of M&A, as well as
advanced corporate finance and valuation textbooks. A necessary (but not sufficient) condition for doing
well in the course is to understand valuation that integrates finance and strategy. The last two books in
the list are good sources.

R. F. Bruner, Applied Mergers and Acquisitions, University Edition, Wiley, 2004

D. DePamphilis, Mergers, Acquisitions and Other Restructuring Activities, 9th edition, Elsevier Academic
Press, 2017
J.F. Weston, M. Mitchell and H. Mulherin, Takeovers, Restructuring and Corporate Governance, 4th
edition, Pearson/Prentice Hall, 2004
A. Damadoran, Investment Valuation, 3rd edition, Wiley, 2012
T. Koller, Marc Goedhart and David Wessels, Valuation: Measuring and Managing the Value of
Companies, 7th (university) edition, McKinsey & Co, John Wiley & Sons, 2020

Useful links for some recent information

Some basic stats on Canadian M&A: http://www.crosbieco.com/ma/index.html
On legal issues in Canada by Stikeman Elliot:
https://www.stikeman.com/en-ca/kh/canadian-ma-law
News articles on M&A and private equity deals: Dealbook by NY times: http://dealbook.nytimes.com/
Industry financial ratios and useful valuation information from Damodaran:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/data.html

Schedule
Note that topics for individual classes are subject to change. It is your responsibility to check Quercus for
possibility of revised cases/assignments, additional readings, materials, and links.

Class
Date Topics Deliverables Readings
#
1 Jan 19/20 Introduction to M&A and This syllabus
course organization
2 Jan 26/27 Takeovers and corporate Case write-up: See case study
governance (FMCG) Ben & Jerry’s Homemade (UVA) questions on
Quercus

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RSM 2309 Mergers and Acquisitions - 2020-21 Spring, Professor Andrey Golubov

3 Feb 2/3 Synergies and how to value Case write-up: See case study
them (Technology) Sun Microsystems (UVA) questions on
Quercus

4 Feb 9/10 Deal financing and payment Case write-up: See case study
methods (Manufacturing) The Timken Company (UVA) questions on
Quercus

5 Feb 16/17 Financial vs. strategic buyers Case write-up: See case study
(Telecom) The Bid for Bell Canada questions on
Enterprises (INSEAD) Quercus

6 Feb 23/24 Deal structuring and Case write-up: See case study
contractual features Dow’s Bid for Rohm and Haas questions on
(Chemicals) (HBS) Quercus

7 Mar 2/3 Bridging the valuation gap Case write-up: See case study
(Biotech/Pharma) Sanofi-Aventis Acquisition of questions on
Genzyme: Contingent Value Quercus
Rights (UVA)

8 Mar 09/10 Merger arbitrage (Industrials) Case write-up: See case study
GE-Honeywell (UVA) questions on
Quercus

9 Mar 16/17 Midterm test (in-class) Midterm test Ivey note “Legal
Aspects of
Legal and regulatory aspects No case (lecture)
Mergers &
(asynchronous material)
Acquisitions in
Canada”

10 Mar 23/24 Corporate restructuring Case write-up: See case study

(Conglomerates) Canadian Pacific Ltd: Unlocking questions on
Shareholder Value in a Quercus
Conglomerate (Ivey)

11 Mar 30/31 Takeover simulation Simulation report and peer Simulation

assessment background
note

12 Apr 6/7 Simulation debrief and

overview of the course

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You are expected to have read the assigned case and any supplementary readings before class,
unless explicitly stated otherwise.

Class Participation
Students are expected to prepare thoroughly and make every effort to attend every class. As class
participation is a graded component of the course, students will be evaluated on the following:
 Preparedness and punctuality
 Engagement with the material being discussed
 Thoughtful responses to instructor’s questions
 Idea generation and insightful questioning
 Consideration for the ideas and responses of others

Your participation in each session will be graded on a scale of 0-2

 “2:”: the student was present and well-prepared; volunteered to answer questions on several
occasions and provided meaningful answers demonstrating original thought, insight, and
background analysis; actively participated in discussions benefiting the learning process; asked
relevant questions; engaged in a positive way with guest speakers (if any).
 “1”: the student was present and prepared; was able to answer questions in a meaningful way
when asked; occasionally contributed to class discussions.
 “0”: the student was absent or showed no participation; was unprepared and unable to answer
questions in a meaningful way when asked.

Class Recordings
Regardless of the statements on recordings below, the instructor may at any time decide to suspend
class recording for any reason, including privacy concerns, intellectual property issues, lack of
attendance, or pedagogical preference.
Course videos and materials belong to your instructor, the University, and/or other sources depending
on the specific facts of each situation, and are protected by copyright. Do not download, copy, or share
any course or student materials or videos without the explicit permission of the instructor.
For questions about recording and use of videos in which you appear please contact your instructor.
Recordings by Rotman
All classes are recorded by Rotman and posted to course page
If Rotman recordings are provided, they are only for the exclusive use of enrolled students, for
personal learning, and not to be shared in any way. Rotman recordings require two business days
before becoming available.
Recordings by Student
You may NOT record class meetings with your own device(s). This prohibition includes taking pictures
of slides and the whiteboard.

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Equity and Diversity for an Online Course

The University of Toronto is committed to equity, human rights and respect for diversity. All members of
the learning environment in this course should strive to create an atmosphere of mutual respect where
all members of our community can express themselves, engage with each other, and respect one
another’s differences. U of T does not condone discrimination or harassment against any persons or
communities.

Academic Integrity
Academic integrity is essential to the pursuit of learning and scholarship in a university, and to ensuring
that a degree from the University of Toronto is a strong signal of each student’s individual academic
achievement. As a result, the University treats cases of cheating and plagiarism very seriously. The
University of Toronto’s Code of Behaviour on Academic Matters outlines the behaviours that constitute
academic dishonesty and the processes for addressing academic offences.
All suspected cases of academic dishonesty will be investigated following procedures outlined in the
Code of Behaviour on Academic Matters. If you have questions or concerns about what constitutes
appropriate academic behaviour or appropriate research and citation methods, please reach out to me.
Note that you are expected to seek out additional information on academic integrity from me or from
other institutional resources (for example, the University of Toronto website on Academic Integrity).

Turnitin.com
Normally, students will be required to submit their course essays to Turnitin.com for a review of textual
similarity and detection of possible plagiarism. In doing so, students will allow their essays to be
included as source documents in the Turnitin.com reference database, where they will be used solely
for the purpose of detecting plagiarism. The terms that apply to the University’s use of the Turnitin.com
service are described on the Turnitin.com website.

ProctorU
Online exam(s) may use online invigilation provided by ProctorU®, an online proctoring service that
allows for completion of the assessment from an off-campus location. It is important that you read
through and familiarize yourself with the requirements, process description, privacy protection and
further information, well in advance of the assessment. Please click here.

Standard Policies
The following are policies students should assume are in force with all Rotman courses. Full details for
each of these policies can be found on the Registrar’s Office website:
1. Academic Accommodations
2. Academic Integrity
3. Accessibility Services
4. Assignment Cover Sheet
5. Class Attendance

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6. Code of Behaviour on Academic Matters

7. Course Drop Deadline Policy, for MBA electives dates check relevant course schedules
8. Grading Policies
9. Group Work and Behaviour
10. Scent-Free Environment
11. Use of Technology

COURSE OUTLINE INDEX

Delivery Mode
Course Description
Course Learning Outcomes
Course Grade Components
Deliverables Descriptions
Readings and Materials
Schedule
Class Participation
Class Recordings
Equity and Diversity for an Online Course
Academic Integrity
Turnitin.com
ProctorU
Standard Policies