LESSON PLAN : 19 MBA FM 421 MERGERS AND ACQUISTIONS
Course Instructor : Ashalatha K
Email :ashalatha@[Link]
[Link] to the Course :
In today’s globalised economy, Organisations have to compete in new ways, striving for
‘Opportunity Share’ in future markets. When the world is witnessing dramatic changes, starting from
Mega Mergers to Mega Bucks, in Corporate Restructuring, creating ripples in the Corporate circles,
there is a need for a strong technical and fundamental understanding of the skill set and tools
required for decision making. Strategic decisions through Mergers and Acquisitions have become
more relevant today than in the past for creating new space for the existing units to claim their pie in
the opportunity share.
The primary objective of this course is to develop a comprehensive understanding of Mergers and
Acquisitions (M&A) from the perspective of the Corporate executive. This course will cover all
major elements of the acquisition process including Corporate strategy, Valuation, Due Diligence,
Financial decisions, Transaction structures, restructuring options, Takeover defence and Integration.
The classes will be delivered through Lectures, Quizzes, Work Book and Presentations followed by
Question and Answers. Selected exercises from 3rd, 4th and 5th module will be solved in class and
cases will be introduced contextually.
This course (M&A ) is a process , where idea needs to get transformed into reality. This process
requires knowledge, understanding a lot of planning at every stage , right from valuation to legal
aspects as well as to proper documentation. Every stage in this process is a challenge and the skill
to make the right decision requiring a strong base.
Prerequisites: Students opting for Mergers and Acquisitions, should have completed Corporate
Finance Course.
NPTEL Online courses - [Link]
[Link]
Merger and Acquisition- [Link]
2. Course Content :
1. Corporate Restructuring and Strategic Approaches
2. Mergers and Acquisitions, Motives, Value Creation
3. Due Diligence and Integration in Mergers and Acquisition
4. Valuation and Purchase Consideration
5. Takeover Defences , Income Tax Act and SEBI Takeover Code.
3 . Course Outcomes:
Code Course Outcomes Program
Outcomes
CO4211 Able to understand clearly the motives behind mergers, Be able PO 6
to create value in different types of mergers resulting Synergy. Be
able to describe the various strategic approaches to M&A.
CO4212 Able to evaluate the valuation using different methods and take PO 6
decisions on Capital Budgeting.
CO4213 Ability to analyze the process of merger integration . Understand PO 6
the role of HRM in M&A integration. To examine the takeover
defences.
4. Prescribed Readings:
1. Weston, Mitchel And Mulherin – “Takeovers, Restructuring And Corporate Governance” –
Pearson Education.
2. Sudarsanam Sudi – “Value Creation From Mergers And Acquisitions” – Pearson Education.
3. M.Y. Khan & P.K. Jain -“Financial Management, 7th Edition, Tata McGraw Hill, Delhi.
4. Picot Gerard -“Handbook of International Mergers & Acquisitions” –-Palgrave Publishers
Ltd.
5. Session – Wise Plan ( One session is 1 hour)
Sessions Topics
1-4 Focus: Strategic Approaches :
Internal and External change forces contributing to M&A
activities, Industry life cycle and Product life cycle analysis,
SWOT analysis, BCG Matrix, Porter’s Five Forces Model,
Reading: 1..Weston, Mitchel And Mulherin – “Takeovers, Restructuring
And Corporate Governance” – Pearson Education.
[Link] Sudi – “Value Creation From Mergers And
Acquisitions” – Pearson Education
5-8 Focus: Corporate Restructuring:
Mergers , Types of mergers, Motives behind mergers, Value
creation in Horizontal,Vertical and Conglomerate Mergers,
Operating , Financial and Managerial Synergies of Mergers.
Joint ventures, Sell off and Spin off, Divestitures,.
Reading: [Link], Mitchel And Mulherin – “Takeovers, Restructuring
And Corporate Governance” – Pearson Education.
9 Activity: Group Activity – Start the Work Book
10-12 Focus: Different Methods of Restructuring :
Equity Carve Out, Leveraged Buy Outs (LBO), Management
Buy Outs, Master Limited Partnerships , ESOP.
Reading: 1. Weston, Mitchel And Mulherin – “Takeovers, Restructuring
And Corporate Governance” – Pearson Education
Activity: Case Study ( L M Ericsson and Sony Corporations = Sony
Ericsson)
13-17 Focus: Due Diligence in M&A:
Process, Meaning, Types, People involved, Parties involved
and steps.
Process and Integration in M&A:
Types of Integration, Role of HRM in M&A Integration, Steps
for OrganizationalIntegration, Integration for M&A success,
Theories of Merger.
Reading: [Link], Mitchel And Mulherin – “Takeovers, Restructuring
And Corporate Governance” – Pearson Education
[Link] Gerard -“Handbook of International Mergers &
Acquisitions” –-Palgrave Publishers Ltd.
18 First Sessional
19 Activity: Presentation of Work Book
20-27 Focus: Valuation and Purchase Consideration:
Problems on DCF method of valuation, Share Exchange Ratio,
P/E ratio, EPS, Merger as a Capital Budgeting Decision.
Purchase Consideration:
Pooling of Interest Method and Purchase Method .Procedure
laid down under Indian Companies Act of 1956.
Reading: [Link], Mitchel And Mulherin – “Takeovers, Restructuring
And Corporate Governance” – Pearson Education
2.M.Y. Khan & P.K. Jain -“Financial Management, 7th Edition,
Tata McGraw Hill, Delhi.
28 Second Sessional
29 -32 Activity: Work Book Presentation
33--35 Focus: Takeovers :
Types of Takeovers , Takeover approaches, Defences,
Defensive measures, Anti – Takeover Amendment
Reading: [Link], Mitchel And Mulherin – “Takeovers, Restructuring
And Corporate Governance” – Pearson Education
36-37 Activity: Work Book Presentation
38 Legal and Regulatory frame work of M&A :
Provisions of Companies Act 1956, Indian Income Tax
Reading [Link], Mitchel And Mulherin – “Takeovers, Restructuring
And Corporate Governance” – Pearson Education
39 Activity: Revision
6. Student Assessment Guidelines
A. Details of Evaluation Components
Type of Assessment Weightage (%) Schedule in the session plan
Semester End Exam 50
Internal Exam -1 10 After session 17
Internal Exam -2 10 After session 27
Work Book Presentation 10 After session 8
Problem Solving 10 After session 28
Assignment
Quiz 10 Surprise quiz on any of the days. No re quiz
will be conducted if it is missed for any
reason
Total 100
B. Guidelines for submitting work Book:
Task 1. Work Book Presentation
Instructions on Report:
a. Each group comprises of 5 members and one of the member will be the group convener
who is going to coordinate the group activities.
b. Complete the formats that would help to successfully complete the exercise. Every week ,
you are required to update the instructor with the work –in- progress and also mail the
same for which the soft copy should be kept ready. No excuses of viruses.
c. You are required to read up the suggested material, discuss in the group, come prepared to
the class, rendering them into presentable slides. In completing the task give explanations
with reasoning.
d. The Work Book will be evaluated on the basis of the following:
i. Analysis and Presentations (7%). In all the classes, the students have to be prepared for
the presentation and groups will be randomly called to make presentations. You will be
examined for your communication, relating the concepts studied in this subject with
the firm you have chosen and the ability to justify . Your ability to be a team player
will be considered and the extend peer learning.
ii. Quality of the work book (2%). At any time the students will be asked to present the
work book and it should be current.
iii. Others (1%). Overall class participation, contribution to others, assignment during the
presentation by those groups, viva voce on the project if deemed necessary by the
instructor.
e. You may be asked to present in any class , for which you have to be Facilities prepared
always.
f. Integrate this activity with Bloom Berg Lab
Chosen M&A ______________________________________________________
[Link] Acquiring Company__________________________________________
1.2. Target Company_____________________________________________
2. The merged companies should be the listed firm.
3. Disclose the deal size of the merged firm.
4. Type of merger?
5. What was the motive behind the merger?
6. SWOT for
a) Acquiring company b) Target company c) Merged company.
7. Financial synergy in this M&A.
8. Industry Life Cycle Analysis.
9. Product Life Cycle Analysis
10. How was due deligence performed by the companies involved? Who did they employ (Merchant
Bankers, legal experts etc.) and how was it done?
11. In this merger what were the source of finance? Were there any impediments for getting finance?
How were they overcome?
12. What has been the performance of the involved companies after the M&A?
13. Who were the beneficiaries in the short and long term?
14. What are the Legal and regulatory frameworks the two companies had to follow before making
M&A possible
15. Comment on the valuation of the target company
16. Comment on the market response to the M&A announcement.
17. Make the following analysis
Sl. No. Particulars Acquirer Target
1. Total Earnings
2. Pre EPS
3. Post EPS
4. MPS
5. No. of Employees ( Pre Merger)
1. No. of Employees ( Post Merger)
2. Market Return
18. Your views in this exercise.
19. Continuous updating of information based on current happenings of the firms after M&A
should be incorporated in the report
Style Guide for Report Submission:
The report should be submitted on the very next day of presentation incorporating all the
changes discussed during presentation.
Font : Times New Roman
Font Size of the Title : 14
Font Size of the body and side heading : 12
Line Spacing : 1.15
Add a space between the paragraph
Tables and charts should be numbered sequentially
No extra space throughout the report
Code of Conduct
1. Students should understand the course learning objectives stated in the course syllabus on the first
day of the class. They should come prepared to the class.
2. Students are always encouraged to ask questions without any hesitations.
3. Students should not enter the class late and also leave the class during lecture time without a valid
urgent reason.
4. Use of mobile phones and laptops are not permitted during the class.
5. Students are required to do some further readings prior to attending the class.
6. Late submission of the assignment is not encouraged.
7. Re Quiz will not be conducted if missed.
8. If any student miss any of the internal exams for any valid reason, no retest will be given. He/She
can take up the third sessional with full syllabus on the date allotted by the PGP office.
Task 2: Problem Solving.
Task 3: Quiz ( Multiple Choice Questions)
Course Instructor ------------------------------------------------------------------------
Director -------------------------------------------------------------------
