MBA/Sem-IV/MBAE-4511/22 MBA (4" Semester) Examinations, 2022 Subject: Merger, Acquisition and Corporate Restructuring Paper: MBAE-4S11 ‘Time: 3 Hours Full Marks: 80 Answer any five questions. 1. @ What is meant by corporate restructuring? (®) Why are restructuring exercises carried out by the comporate houses? (© ‘The term ‘corporate restructuring’ encompasses in its fold four distinct, but related strategies/ activities ~ expansion, contraction, control and ownership’. In the ight of the eiven statement, state the different forms of expansion strategy adopted in the corporate world, 448816 2. Discuss, in detail, the various motives of merger and acquisition. 6 3. (@) Explain the concept of ‘synergy’ in the context of merger and acquisition. (b) G Ltd. is considering acquisition of H Ltd. by paying Rs. 9 crores. G Ltd. has a pre ‘merger value of Rs, 3600 lakhs, while H Ltd, has 5,00,000 shares of Rs. 120 market vale Per share. The value of G Ltd, after the acquisition exercise is expected to be Rs, 50 crores. You are required to: @) Determine the economic gain expected to arise from the acquisition; i) Explain the sharing of such value between two firms; . (Gi) Offer your comments regarding the feasibility of the merger. 4n2=16 4G) "Postmerger integration i a process which involves diffrent levels’ — Inthe light ofthe given statement, explain the various levels that are usually involved in ostemerger integration. (b) Discuss the different sources of financing a merger and acquisition deal, B16 5.(@) What are the different take-over strate (b) Describe any four defense strategies take-over bid. gies that are adopted by an acquiring firm? that are adopted by the target firm against any hostile BH8=16 6.(@) Levered multiples are also referred to as Equity Multiples’ ~ Comment. () Galaxy Ltd. isa large-cap manufacturing firm. Its Income Statement reflects the following figures (in Rs. million): Total Revenue Rs, 6,850; EBITDA Rs. 1,470; EBIT Rs. 955; PAT Rs. 650. The blast sheet of the firm reflects borrowed capital of Rs. 288 million and cash worth Rs. 45 million. You have been appointed as the valuer for the firm. In this rear, you bt identified the following comparable fms having te given details (Rs MionComparable | Revenue | EBITDA | EBI PE | Enterprise a Value 645 10 30,000 6874 24 30,500 6234 000 [6140 32,500 0255 35,800 6358 32,700 _| 6475, 34,800 |__6520_ _ 31,400 Additional information: ‘The firm has sufficient investments in property, plant & equipment. olt stands somewhere in the middle of the comparable firms” universe. 6410-16 You are required to ascertain the equity value of the company. 7, (a)What do you mean by Due Diligence in the context of merger & acquisition? (b) Discuss, in detail, any four non-financial items that are required to be covered under due 4412-16 diligence process of a merger deal. 8, (a) What do you mean by post-merger integration of merger & acquis (b) Zoro Ltd. intends to takeover Yono Ltd. on “share exchange’ basis. The position of the isition was as under: tion deal? No. of Equity shares Total Eamings *2,00,000 | *1,00,000 Market price per share “20 15 ‘offered 3 shares of Zoro Ltd. for 4 shares of Yono Ltd. ‘The shareholders of Yono Ltd. are You are required to calculate: s-d-vis before takeover position of the two companies; i) EPS of the merged company vis i) Gait” loss of the sharcholders ofboth the firms consequent to merger. 4412-16 success of a merger deal’. Comment. Ltd. The following terms have been agreed jes regarding share swap ratio: Book value per share, Market price 9, (@) ‘Due diligence does not guarantee (b) Sony Ltd. plans to takeover Samsung between the Directors of the two compani (j) Three parameters are to be considered namely, per share and Eamings per share. i) The swap ratios based on these three parameters are 0.30, 0.50 and 1.2 respectively (ii) The weights to be assigned for determining the final swap ratio has been negotiated to be 0.15, 0.35 and 0.50 respectively. Given that Sony Ltd. has 40,00,000 shares outstanding, compute the Share Swap Ratio, 6110-16 10. Write short notes on: (2) Benefits of cross-border acquisitions 848-16 (b) Strategic Alliances eR REESE ENE EEEE