Mergers and Acquisitions

Have you ever dreamt of becoming an investment banker or lawyer specialising in the fantastic world of M&As? Come and explore this interesting course…

Name of minor: Mergers and Acquisitions
Code: MINRSM008
Teaching language: English
Offered by: Rotterdam School of Management, Erasmus University (RSM); Department of Finance
Other programmes which are contributing to the minor: not applicable
Access: See admissions matrix

Content

Since the late 1990s and until the burst of the 2008-2009 global financial crisis, we have witnessed a dramatic increase in both domestic and international mergers and acquisitions (M&A) in Europe, the U.S. and in the rest of the world. Corporate finance theory suggests that takeovers and corporate restructuring can serve as an effective strategic tool for companies to respond to changes in the economic environment and, thus, create value for their shareholders. This course deals with mergers, acquisitions and other corporate restructuring activities in an international context. The course concentrates on the motives and strategic aspects of takeovers and restructuring, the valuation of firms involved in takeovers, the role of agency conflicts (between the management and the shareholders of a corporation) in takeovers, the effect of takeovers and restructuring on shareholder value and the practical aspects of the takeover process. It introduces the key principles and techniques of successful mergers, acquisitions, divestitures and leveraged buyouts. Next to taking a purely financial view, we also look at the psychological aspects of corporate restructuring transactions. For example, it has been shown that a lot of managers take over other firms simply because they are too confident about the value of the target, or because they want to boost their ego. We will discuss academic articles as well as anecdotal evidence about these irrational elements in M&A activity. Moreover, we will discuss the impact of the 2008-2009 financial crisis on M&A and corporate restructuring activities throughout the world. During the course, we will address such crucial questions as: Why do takeover deals that looked great on paper fail in reality? How does one value companies acquiring, or being acquired? What is the best negotiation strategy? How can one properly manage risks when designing a deal? What does it take to make the “synergy” come to life?

Learning objectives:

After taking this course, you will (1) have gained a broad and solid understanding of key theoretical and practical aspects of M&A; (2) be able to analyse a real world M&A transaction independently; and (3) have learned how to work in a team, and be able to “pitch” ideas in competitive environment.

Specific characteristics:

Whether you will become a corporate CEO, a lawyer, a journalist, an investment banker, an engineer, an academic or an auditor, the chances are big that you will, at one point or another in your professional career, be confronted with M&A activity, either directly or indirectly. This course is directed to a wide population of students from various backgrounds. The required skills for the course are: Basic insights in math and statistics; good knowledge of English; some basic knowledge on corporate finance would be a plus, but is not essential.

Organization

Maximum number of students that can participate in the minor: not applicable
Minimum number of students that can participate in the minor: 8
Studie load: 15 ects (420 hours)

Teaching methods:

The course consists of 6 modules (See Course Outline), and will be taught through both lectures and workshops:  

Lectures
The lectures are intended to discuss topical M&A themes that are discussed in carefully selected chapters of the required textbooks and academic articles. We also try to invite guest lecturers that represent different viewpoints on M&A activity to our class meeting(s). Guest lecturers are usually senior practitioners with a wealth of experience in deal-making, notably gained at top-tier investment banks / consultancy firms. Whilst the set-up of the lectures is to some extent interactive, the workshops are fully “Q&A” based.

Workshops
During the opening lecture you have the opportunity to form a team of no more than 4 students (minimum 3), which will be your team for the 4 group assignments (thus, there will be 4 workshops). During the workshops, you are expected to present and discuss the results of group assignments (e.g., case studies, discussion of academic articles, etc.). The format of workshops will vary. Sometimes, groups will be asked to take stands on certain issues and defend their positions. Sometimes the main issue will be identified and you will be asked to develop specific answers to well-posed questions. Sometimes, however, you will have to identify the problems as well and live with the ambiguity that comes from the absence of clear-cut solutions. Our focus is not to solve every problem without dispute but to learn how to frame and think about the underlying issues. Group-work is absolutely critical to your learning as you will typically learn as much (if not more) from your small group discussions as from the class sessions. Note that when you aim to pursue a career in M&A, you’re often expected to work in teams (typically with a certain industry specialisation). In addition, we aim to introduce a competition element into the group presentations (in spirit of the well-known M&A beauty pageant culture).Attendance to all lectures and workshops is mandatory.

Teaching materials:

Required textbook:

  • “Mergers, acquisitions and corporate restructurings” by Patrick A. Gaughan, 4th ed., John Wiley & Sons, 2007

Examination

Method of examination:

Each student will be given the opportunity to demonstrate their understanding of the art and science of M&A through workshop (group) assignments, in-class presentations and in-class plenary discussions. Grading will be based on your classroom participation, assignments and a final exam.

The break-up of the grade is as follows:

50% - Workshop (group) assignments and participation in class discussion 
Each group is required to turn in one and only one group report for each workshop (group) assignment. Reports will typically be 3-4 pages long plus any supporting materials (e.g., tables and graphs). Each group should turn in the report (in softcopy through Blackboard) before the deadline. Grade of each workshop assignment will be given to the entire group based on the quality of your group report and in-class presentation performance. Please note that a small but significant component (10%) is based on your individual contribution to in-class discussions. 

50% - Final Exam
Exam questions will be related to the course material covered in class meetings (lectures, workshops, guest lectures, articles, plus anything discussed during the lectures and workshops). The final exam is closed book.

Contact information

Contact person:

Dr. Thomas Lambert
t.lambert@remove-this.rsm.nl 
Phone: (010) 408 1450
Room: T08-40

Faculty websites:

Minor website RSM
Personal page T. Lambert