Minor Mergers and Acquisitions

Category
Broadening minor
Minor code
MINRSM008

Content

Since the late 1990s and until the burst of the 2008–09 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, the course also looks 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. The course discusses academic articles as well as anecdotal evidence about these irrational elements in M&A activity. Moreover, it discusses the impact of the 2008–2009 financial crisis on M&A and corporate restructuring activities throughout the world. This course addresses 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? When do leveraged buy-outs make sense, and how can they be financed?

Learning objectives

 

  • Gaining a broad and solid understanding of all important aspects of M&A so the student is able to discuss this variety of aspects that come into play during a transaction and use and compare these aspects with real or realistic examples.
  • Having good knowledge of how M&A works from both theoretical and practical perspectives so that the student is able to describe and discuss the entire process of a merger or acquisition.
  • Being able to analyze a real-world M&A transaction rigorously and form an opinion about it.
  • Learning how to work in a team, and be able to “pitch” ideas in a competitive environment

Special aspects

This course is directed to a wide population of students from various backgrounds. There are no official prerequisites for this course. However, it is strongly recommended that you have some knowledge on Corporate Finance, Financial Statement Analysis/Accounting and Business Economics.
In general, students who do not study business or economics, but do have other quantitative courses in their main studies, perform well is this course.

Students that lack both the knowledge on economics/finance and have difficulties in working with numbers are strongly recommended NOT to follow this Minor.

All RSM minors have mandatory attendance.

  • The workload of this minor is heavy and therefore requires strong time management skills. Second-year students are recommended to think twice before they decide to combine their other courses with minor.
  • n spite of the workload, students think the course is fun, primarily due to a) the broad overview that sparks your interest on future career opportunities and b) at the end of the course one of the guest companies provides you with a real-life case that gives you the opportunity to be “M&A consultant for one week”
  • Students from previous years indicated that the exam is difficult but fair. The exam does not only test your ability to memorize but also your deeper understanding. Passing the course with a high grade (8.0) is surely possible, but only with active in-class participation and the strong ability to think critically.

Overview content per week

Note: this overview describes the weekplan in the previous academic year. The topics during this academic year will be largely the same, but not necessarily in this order.

Week 1: Course Introduction

                 Basic Terminology

                 The motives for firms to be involved in M&A

Week 2: Theory on the value creation/destruction of M&A

                 Due Diligence and Negotiations

Week 3: Business Case 1

Week 4: Valuation
              Corporate Finance

Week 5: The role of governance

                 Business Case 2

Week 6: Strategy
                 Private Equity

                 Business Case 3

Week 7: History of M&A

                 Business Case 4

Week 8: Exam Preparation

Teaching methods

  • Lectures where the broad overview is provided
  • Workshops where students have to present and discuss their business cases
  • Guest Lectures where people from the industry share their experiences

Teaching Materials

  • Several chapters from the book “ Applied Mergers and Acquisitions” by R. Bruner (2004)
  • Several (academic) articles
  • Lecture Slides
  • Harvard Business Cases

Examination

Method of examination

  • Group assignments are related to specific M&A topics. Each group is required to turn in four group assignments, which are typically 4-5 pages long plus any supporting materials (e.g., tables and graphs). Group assignments are in turn discussed during the workshops. There is no re-sit possibility for the group assignment and therefore no minimum grade.
  • The written test is closed book. Test questions are related to the course material covered (lectures, workshops, textbook chapters and articles, plus anything discussed during the course).
  • In-class involvement: The grade on class involvement is based on the quality of the presentations and discussions during the workshops and general participation in-class.

Composition final grade
60% Written test
25% Group assignments
15% In-class Involvement

The final grade consists of the four group assignments (25%), the written test (60%) and the in-class involvement (15%). To be eligible to obtain a final grade, your written test grade needs to be at least 4.5. The grade of each group assignment depends on the quality of both written report and in-class presentation and the four group assignments are equally weighted. Furthermore, the grade of each written report is given to the entire group, while the grade of each in-class presentation performance is given individually. There is no re-sit possibility for the group assignment and therefore no minimum grade.

Feedback
Feedback will be provided online and during class.

Contact information

Stefan van Kampen
skampen@rsm.nl
+31 (0) 10 408 1022                                  
room: T08-42

 

Category
Broadening minor
Minor code
MINRSM008
Organisation
Rotterdam School of Management, Erasmus University
Study points (ECTS)
15
Instruction language
English
Location
Campus Woudestein, Rotterdam

Registration

Please read the application procedure for more information.