Post Graduate Diploma in Management (PGDM) 2021-23

Name of the Course – Merger and Acquisition Semester – III

Course Code – 3206 Credits – 01 No. of Sessions –10
Faculty Name – Dr. Mahuya Basu

About the Course

 Description

Mergers, acquisitions, business alliances and corporate restructuring activities are increasingly
commonplace in both developed and emerging countries. Given the frequency with which such activities
occur, it is critical for business people and officials at all levels of government to have a basic understanding
of why and how such activities take place. The objective of this course is to bring clarity to what can be an
exciting, complex and sometimes debatable subject. This course is intended to help the students think of the
activities involved in Mergers, Acquisition, Business Alliances and Corporate Restructuring in an integrated
way.

On the Indian scene corporate are seriously looking at Mergers, Acquisitions, and Restructuring which has
indeed become the order of the day. Most of the business groups and their companies seem to be engaged
in some kind of corporate restructuring or the other. The pace and intensity of corporate restructuring has
increased since the beginning of the liberalization era, thanks to greater competitive pressures and a more
permissive environment.

 Learning Objectives

 The sessions will equip the students with the information and tools needed to effectively handle the cases
of Mergers and Acquisitions.
 The students will learn the types of Mergers, Reasons for Mergers and Takeovers as well as Accounting
Intricacies and also the Dynamics of Restructuring

 Learning Outcome

 Understand the concepts learnt in Financial Management like inorganic business growth, EPS, PE ratio,
NPV & DCF and in Advance accounting & Taxation.
 Understand the distinction between Mergers and Acquisitions (M & A), theories and reasons of M & A,
different Forms of Restructuring, types of Mergers; concepts of Synergies and Strategies of M & A; how
a Deal is structured, accounting of M & A, taxability, methods of payment and determination of exchange
ratios ; how M & A enhances value of a Firm; Preventive and Active Defence Strategies against Take-
over of a Firm; Analysis of valuation, valuation models and concepts of Free cash flow to Firm (FCFF) &
Free cash flow to Equity (FCFE).
 Solve problems on exchange ratio, cost of mergers, Gains/Loss to the shareholders after Mergers,
FCFF, FCFE and computation of NPV of the merged Business.
 Analyze current live cases of Mergers & Acquisitions in terms of Forms of Restructuring, Types of
Mergers, Synergies, Strategies and Methods of Payment.
 Evaluate and Debate on the prospects of success or failure of recent real-life Mergers, types of M&A,
forms of corporate restructuring, strategies and synergies

Course Pedagogy
Significant Teaching Techniques include:

Power Point Presentations, Case Studies, Class Discussions, White Board, Group Activities/Debates,
Illustrations, Assignments, MCQs, Group Projects/Presentation

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Post Graduate Diploma in Management (PGDM) 2021-23

Name of the Course – Merger and Acquisition Semester – III

Course Code – 3206 Credits – 01 No. of Sessions –10
Faculty Name – Dr. Mahuya Basu

Course Material

 Text Books

1. Mergers, Acquisitions and Other Restructuring Activities, Donald M. DePamphilis, 5e,EL

2. Damodaran on Valuation: Security Analysis for Investment and Corporate Finance by Aswath
Damodaran, 2e, John Wiley & Sons, 2006

 Reference Books

1. Mergers, Acquisitions and Corporate Restructurings by Patrick A. Gaughan, 5e, John Wiley & Sons,
Inc.,2011
2. Mergers and Acquisitions by J. Fred Weston and Samuel C. Weaver, 1e McGraw-Hill,2002

Note- Students will have access to eGlobsyn portal where they can get additional materials like class ppt/video
links, ebooks and other materials in connection to the course.

 Course Requirements

1. Students should read the pedagogy prior to each session and also prepare for the case
studies/projectsin the learning group to which they would have already been assigned.
2. Students will be required to present the case studies/group projects/readings in these learning groups
asdirected or suggested by the professors in the class
3. Each Students will be required to make weekly submissions of assignments given during the week
4. The assignments will generally be in the form of Multiple Choice Questions and will be put up in
eGlobsyn with necessary instructions for submissions
5. There will also be Project Presentations during the Module

 Evaluation Pattern

Assessment Methods Weightage

Class Attendance 20%
Continuous Evaluation 30%
End Semester Exams 50%

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Post Graduate Diploma in Management (PGDM) 2021-23

Name of the Course – Merger and Acquisition Semester – III

Course Code – 3206 Credits – 01 No. of Sessions –10
Faculty Name – Dr. Mahuya Basu

Course Delivery Plan

Each module has a structure that will be followed right through the course. Students are expected to prepare
themselves by reading the relevant text/cases before each session and adhere to the dates of submission which
will be notified in class. Students are encouraged to refer to journals, books, websites etc. in connection to the
concepts taught in class.

Module I – Introduction to Mergers, Acquisitions and Restructuring

Learning Objectives –

 The objective of the module is to enable students gain in-depth knowledge about the concept of merger,
acquisition and other restructuring activities.

Session
Session Details Activity in class Readings
No.

Introduction to Mergers, Acquisitions Introduction to the Chapter 1: Mergers,

and Restructuring course, Concept Acquisitions and other
discussion) Restructuring Activity- Donald
1 Concept of mergers, acquisitions and M. DePamphilis (Elsevier – 8th
other forms of restructuring, theories and Edition)
causes of Mergers and Acquisitions.

Module I – Key Concepts Covered: Mergers, Acquisitions and Restructuring

Module II – Strategy

Learning Objectives –

 Understand and analyse a firm’s strategic planning process within which the firm’s M&A policies and
decisions take place

Session
Session Details Activity in class Readings
No.

Strategy for Merger & Takeover Chapter 3: Mergers, Acquisitions

(Concept
Strategic planning process of a firm within and other Restructuring Activity-
2 discussion
which the firm’s M&A policies and Donald M. DePamphilis
followed by Q&A)
decisions take place. (Elsevier – 8th Edition)

Strategy for Takeover Defenses (Concept Chapter 3: Mergers, Acquisitions

Defensive strategies used against Anti- discussion and other Restructuring Activity-
3
Takeover Bids - preventive & active followed by Q&A, Donald M. DePamphilis
measure MCQ) (Elsevier – 8th Edition)

Module II – Key Concepts Covered: Strategic planning processes for Merger & Acquisition

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Post Graduate Diploma in Management (PGDM) 2021-23

Name of the Course – Merger and Acquisition Semester – III

Course Code – 3206 Credits – 01 No. of Sessions –10
Faculty Name – Dr. Mahuya Basu

Module III – Deal Structuring for Merger

Learning Objectives –

 Learn how a M & A deal is structured, the choice of accounting method, taxability, methods of payment,
premiums, contingent payouts, and the use of collars in designing the terms of a transaction

Session
Session Details Activity in class Readings
No.

(Concept Chapter 11: Mergers,

Structuring of a M&A deal
discussion Acquisitions and other
Deal structuring process, forms of
4 followed by Q&A, Restructuring Activity- Donald M.
payment, form of acquisitions, exchange
MCQ and DePamphilis (Elsevier – 8th
ratio
illustrations) Edition)

(Concept Chapter 13: Mergers,

Financing a Merger
discussion Acquisitions and other
Financing option, role of hedge fund &
5 followed by Q&A, Restructuring Activity- Donald M.
private equity in deal financing, LBO as
MCQ and DePamphilis (Elsevier – 8th
financing strategy
illustrations) Edition)

Module III – Key Concepts Covered: Factors considered in structuring of a M&A Deal, Exchange Ratio,
financing a merger deal

Module IV – Valuation I& II

Learning Objectives –

 Understand the purpose of a valuation analysis and analyze t he different models of valuation Explain
Free Cash Flow to Equity (FCFE) and Free Cash Flow for the Firm (FCFF)
 Learn the calculation of FCFF & FCFE valuation models with the help of MS-Excel and apply in real life
Company Valuations
Session
Session Details Activity in class Readings
No.

Valuation I Concept Chapter 6: Damodaran on

Valuation analysis and different models of discussion, Valuation: Security Analysis for
6 valuation. Concept of Free Cash Flow to elaborate Investment and Corporate
Equity (FCFE) and Free Cash Flow for explanation with Finance by Aswath Damodaran,
The Firm (FCFF) illustrations) 2e, John Wiley & Sons, 2006

Valuation II (Concept Chapter 6: Damodaran on

Calculation of FCFF & FCFE valuation discussion, Valuation: Security Analysis for
7 models with the help of MS-Excel and elaborate Investment and Corporate
application on real life Company explanation with Finance by Aswath Damodaran,
Valuations illustrations) 2e, John Wiley & Sons, 2006

Module IV – Key Concepts Covered: Valuation analysis and different models of valuation, Free Cash Flow to
Equity (FCFE) and Free Cash Flow for the Firm (FCFF)

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Post Graduate Diploma in Management (PGDM) 2021-23

Name of the Course – Merger and Acquisition Semester – III

Course Code – 3206 Credits – 01 No. of Sessions –10
Faculty Name – Dr. Mahuya Basu

Module V – Restructuring and Financial Engineering

Learning Objectives –

 Gain in-depth understanding of the different methods of reorganizing the assets, operations, and
ownership structures of the firm to enhance organizational values

Session
Session Details Activity in class Readings
No.

Restructuring and Financial (Concept Chapter 1: Mergers, Acquisitions

Engineering discussion and other Restructuring Activity-
followed by Q&A, Donald M. DePamphilis
8 Restructuring concept – going private, MCQs) (Elsevier – 8th Edition)
LBO & ESOP (concept only)
Concept of demerger – divestitures, spin-
ff & split off. (Concept only)

Module V – Key Concepts Covered: Different methods of reorganizing the assets, operations, and ownership
structures of the firm.

Module VI – Restructuring and Financial Engineering

Learning Objectives –

 Gain in-depth understanding of the different methods of reorganizing the assets, operations, and
ownership structures of the firm to enhance organizational values
Session
Session Details Activity in class Readings
No.

Restructuring and Financial (Concept Chapter 1: Mergers, Acquisitions

Engineering discussion and other Restructuring Activity-
9 followed by Q&A, Donald M. DePamphilis
Restructuring concept – going private, MCQs) (Elsevier – 8th Edition)
LBO & ESOP (concept only)
Concept of demerger – divestitures, spin-
ff & split off. (Concept only)
Module VI – Key Concepts Covered: Different methods of reorganizing the assets, operations, and ownership
structures of the firm.

Module VII – Analysis of Real - Life Current Mergers and Acquisitions

Learning Objectives –
 Discuss, debate and understand the nature of company activities, deal settlement on most recent
Mergers and types of M&A, forms of corporate restructuring, strategies and synergies.
Session
Session Details Activity in class Readings
No.

10 Integrated Case Study: - Case will be shared

Module VIII – Key Concepts Covered: Recent Mergers, types of M&A, forms of corporate restructuring,
strategies and synergies

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