Mergers

Mergers & Acquisitions and Company Valuation

(MSc Finance 2013-2014)

Course page at Moodle

http://ggsb.grenoble-em.com/course/view.php?id=892

Syllabus

https://sites.google.com/site/zhaoshan75/mergers/syllabus.pdf

Outline

https://sites.google.com/site/zhaoshan75/mergers/outline_merger.pdf

Summary of Chapter 3-15 of Berk-DeMarzo book

https://sites.google.com/site/zhaoshan75/mergers/summary3_15.pdf

Session 1

Preclass assingment

Watch the video below to understand what is finance and why finance is fascinating.

http://ggsb.grenoble-em.com/mod/resource/view.php?id=38695

Slides

https://sites.google.com/site/zhaoshan75/mergers/Berk_18class2.ppt

Review of some concepts in corporate finance

https://sites.google.com/site/zhaoshan75/mergers/review_CF.ppt

Additional explanation

https://sites.google.com/site/zhaoshan75/mergers/ses1.pdf

Exercise:

Required: 5, 8, 9,

Recommended: 1, 4, 6, 11

Session 2

Exercise:

Required: 13, 16, 18,

Recommended: 12

Session 3

Slides

https://sites.google.com/site/zhaoshan75/mergers/valuation1.pdf

https://sites.google.com/site/zhaoshan75/mergers/Berk_19class2.ppt

Additional explanation

https://sites.google.com/site/zhaoshan75/mergers/ses2.pdf

As an alternative to historical data, one can estimate the future market risk premium implied by current stock prices.

https://sites.google.com/site/zhaoshan75/mergers/ImpliedEquityPremium.pdf

Deutsche Bank and Disney examples

https://sites.google.com/site/zhaoshan75/mergers/example_valuation.pdf

https://sites.google.com/site/zhaoshan75/mergers/disney.xls

Aardvark exercise and answer

https://sites.google.com/site/zhaoshan75/mergers/Aardvark.docx

Session 4

Valuation using Multiples (please read comments for more explanation.)

https://sites.google.com/site/zhaoshan75/mergers/multiples.pdf

longer version:

https://sites.google.com/site/zhaoshan75/mergers/multiples.ppt

Solution and Exercises on Multiples

https://sites.google.com/site/zhaoshan75/mergers/solution_multiples.pdf

Midterm (30 minites)

Sample Midterm

https://sites.google.com/site/zhaoshan75/mergers/midterm1.pdf

https://sites.google.com/site/zhaoshan75/mergers/midterm2.pdf

Session 5

Case class instruction

https://sites.google.com/site/zhaoshan75/mergers/Case_Class.pdf

Scoring Sheet for Presentations

https://sites.google.com/site/zhaoshan75/mergers/Rubric_Presentation.pdf

Acquisition of APC by Schneider Electric:

http://ggsb.grenoble-em.com/mod/resource/view.php?id=38957

What Value for Facebook?

http://ggsb.grenoble-em.com/mod/resource/view.php?id=38958

Some tips on presentation and making slides

https://sites.google.com/site/zhaoshan75/mergers/tips_presentation_slides.pdf

Getting data from Bloomberg

https://sites.google.com/site/zhaoshan75/mergers/BloombergIntroduction.pdf

Valuation Examples

* Chapter 19 of Berk and DeMarzo (its spreadsheet programs can be downloaded from the website of the book.)

* spreadsheet program "ValueMerge.xls" from

http://fisher.osu.edu/fin/faculty/walkling/spreadsheets%20for%20Bruner/index.html

* Deutsche Bank and Disney example

https://sites.google.com/site/zhaoshan75/mergers/example_valuation.pdf

https://sites.google.com/site/zhaoshan75/mergers/disney.xls

Valuation resources from NYU

http://pages.stern.nyu.edu/~ADAMODAR/New_Home_Page/valuation/val.htm

http://pages.stern.nyu.edu/~ADAMODAR/New_Home_Page/eqdata.htm

http://pages.stern.nyu.edu/~ADAMODAR/New_Home_Page/spreadsh.htm

http://people.stern.nyu.edu/adamodar/pdfiles/eqprojects/valproject1.pdf

http://people.stern.nyu.edu/adamodar/pdfiles/eqprojects/valproject9.pdf

Group Member Evaluation Form

https://sites.google.com/site/zhaoshan75/mergers/GroupMemberEvaluation.doc

Final Exam

The quantitative exercises will be only based on Chaper 18, 19, 9 of Berk-DeMarzo. The conceptual exercises will be based on both those chapters and lecture notes.

Sample Exam

https://sites.google.com/site/zhaoshan75/mergers/sample_exam.pdf

Solution

https://sites.google.com/site/zhaoshan75/mergers/grenoble_solution2013.pdf

Miscellaneous

Smarter way to study

https://sites.google.com/site/zhaoshan75/mergers/smarter_way.pdf

Useful Links For the Course

1. Major Links

2. Additional References

3. More links

4. Fun stuffs related to finance

5. Open On-line Courses

** Highly Recommended

* Recommended

Latest update highlighted in red!

1. Major Links

** http://www.ft.com (free registration using GEM email box. You can also read FT newspaper at the school Library)

** www.economist.com (a must read weekly magazine. It can be found in the school library)

Website of the textbook Berk and DeMarzo

http://www.pearsonhighered.com/berk_demarzo/

** Deal Book at NYT

http://dealbook.nytimes.com

** Deal Journal at WSJ

http://blogs.wsj.com/moneybeat/

The 10 largest M&A deals of all time

http://www.investmentweek.co.uk/investment-week/news/2144492/the10-largest-deals

Vodafone Air Touch’s Bid for Mannesmann (.xls format)

http://www.kellogg.northwestern.edu/faculty/thompsnt/htm/d42/cases.htm

* http://finance.yahoo.com

MarketWatch, a subsidiary of Dow Jones

http://www.marketwatch.com

http://www.reuters.com/finance/stocks

http://www.reuters.com/finance/deals

US company filings

http://www.sec.gov/edgar.shtml

Read and search Wall Street Journal at Factiva for free

http://libraryds.grenoble-em.com/en/Pages/default.aspx

ProQuest databases

http://libraryds.grenoble-em.com/en/databases/Pages/academicjournals.aspx

Corporate tax rates around the world

http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx

Federal Reserve Bank of St. Louis (http://research.stlouisfed.org/fred2/). US macroeconomic data.

Finance and Economics on the Web

http://webpage.pace.edu/pviswanath/finance.html

*Free Cases

The Merger of Hewlett-Packard and Compaq (A) Strategy and Valuation

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=909887

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=909888

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=909889

Package War: Fedex Vs. Ups

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=909934

2. Additional References

a. Company valuation

Principas of Corporate Finance, by Richard Brealey, Stewart Myers and Franklin Allen, McGraw Hill.

Corporate Finance, by Stephen Ross, Randolph Westerfield and Jeffrey Jaffe, later edition, McGraw

Hill.

Applied Mergers and Acquisitions 2004 by R. F. Bruner,

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=553561

Discounting Tax Shields and the Unlevered Cost of Capital

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1488437

* The Assumptions and Math Behind Wacc and Apv Calculations

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=837384

3. More links

Mergers & Acquisitions in the US

http://www.crossbordermanagement.com/en/guides/mergers-a-acquisitions-in-the-us

Investment Banks

Consultants

Law firms