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…
Mergers and Acquisitions
Programme which has the coordinating role for this minor:
Rotterdam School of Management, Erasmus University (RSM); Department of Finance
Other programmes which are contributing to the minor:
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, 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?
- Gaining a broad and solid understanding of all important aspects of M&A
- Having good knowledge of how M&A works from both theoretical and practical perspectives
- 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 competitive environment
This course is directed to a wide population of students from various backgrounds. There are thus no formal prerequisites for taking BKBMIN008. Yet, I strongly advise you to have finished introductory courses of Corporate Finance and Financial Statement Analysis prior to starting with BKBMIN008.
Class participation is an important and essential part of this course and attendance is therefore compulsory.
Maximum number of students that can participate: NA
Minimum number of students that can participate: 8
Contact hours: 50
Self-study hours: 370
The course load of this BKBMIN008 course is set at 15 ECTS, representing a time budget of 420 hrs. To achieve the intended learning outcomes, the course is taught through both lectures and workshops:
The lectures are intended to discuss topical M&A themes that are presented in carefully selected chapters of the required textbook and academic articles. Guest lectures from senior practitioners with a wealth of experience in deal-making gained at top-tier investment banks/consultancy firms are usually also arranged.
Whilst the set-up of the lectures is to some extent interactive, the workshops are fully “Q&A” based. The workshops are intended to present and discuss the results of group assignments (e.g., case studies, discussion of academic articles, real-world deal analysis, etc.). The format of workshops varies. Sometimes, groups are asked to take stands on certain issues and defend their positions. Sometimes the main issue is identified and students are asked to develop specific answers to well-posed questions. Sometimes, however, students have to identify the problems as well and live with the ambiguity that comes from the absence of clear-cut solutions. The 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 learning as students will typically learn as much (if not more) from their small group discussions as from the class sessions. All details on each workshop (i.e., information on written reports, oral presentations and evaluations) are presented in class and posted on the Blackboard in due time.
During the opening lecture students have the opportunity to form a team of no less than 4 students (maximum 5), which will be their team for the group assignments.
This course covers selected chapters from the following textbook:
- Gaughan, P. A., 2015. Mergers, Acquisitions, and Corporate Restructurings. 6th Edition (Wiley) – ISBN: 978-1-118-99754-3.
In addition, the course covers a selection of (approximately 15) academic articles.
Method of examination:
Each student will be given the opportunity to demonstrate their understanding of the art and science of M&A through group assignments, written exam, in-class presentations and in-class plenary discussions. Grading is based on group assignments, a written test, and bonus points.
The break-up of the examination is as follows:
- Group assignments
Each group is required to turn in one group assignment for each workshop. Group assignments are typically 4-5 pages long plus any supporting materials (e.g., tables and graphs). Grade of each group assignment are given to the entire group based on the quality of your group assignment and in-class presentation performance.
- Written test
The written test is closed book. Test questions are related to the course material covered (lectures, workshops, guest lectures, textbook chapters and articles, plus anything discussed during the course). The test consists of 30 multiple choice questions and 2 open case questions. The re-sit written test has the same structure and format.
- Bonus points
On top of the group assignments and the written test, a small number of students may be awarded with bonus points for their outstanding in-class participation/contribution. Those students can earn either 0.5 or 1.0 bonus points, which is added to their final grade only if the student scores 5.5 or higher for the final written test. The final grade for the course is capped at 10. Any bonus points obtained cannot be used for the re-sit test.
- Group Assignments:
Answers of each group assignment are discussed in class. For some group assignments the answers are also posted on the Blackboard.
- Written and Re-sit tests:
A perusal is organized after both written and re-sit tests. The date, time and place of the perusal are announced when the grades are published.
Composition of final grade:
Group assignments (40%), written closed-book test (60%), plus bonus points (if any). The minimum grade requirement for the written test is 4.5/10.
Name: Dr Thomas Lambert
Phonenumber: +31 (0) 10 408 1450