Chapter-1收購、兼并和重組課后題目教學課件解析

1、Introduction to Mergers, Acquisitions, & Other Restructuring Activities第1頁，共29頁。If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a life time. Lao Tze第2頁，共29頁。Success is a Personal ChoiceWe can choose to be successful by Setting goals,Having high expectat

2、ions of ourselves,Never quitting, By not making excuses, and By accepting personal responsibility第3頁，共29頁。Exhibit 1: Course Layout: Mergers, Acquisitions, and Other Restructuring ActivitiesPart IV: Deal Structuring and FinancingPart II: M&A ProcessPart I: M&A EnvironmentCh. 11: Payment and Legal Con

3、siderationsCh. 7: Discounted Cash Flow ValuationCh. 9: Financial Modeling TechniquesCh. 6: M&A Postclosing IntegrationCh. 4: Business and Acquisition PlansCh. 5: Search through Closing ActivitiesPart V: Alternative Business and Restructuring Strategies Ch. 12: Accounting & Tax ConsiderationsCh. 15:

4、Business AlliancesCh. 16: Divestitures, Spin-Offs, Split-Offs, and Equity Carve-OutsCh. 17: Bankruptcy and LiquidationCh. 2: Regulatory ConsiderationsCh. 1: Motivations for M&APart III: M&A Valuation and Modeling Ch. 3: Takeover Tactics, Defenses, and Corporate GovernanceCh. 13: Financing the Deal C

5、h. 8: Relative Valuation MethodologiesCh. 18: Cross-Border TransactionsCh. 14: Valuing Highly Leveraged Transactions Ch. 10: Private Company Valuation第4頁，共29頁。Course Learning ObjectivesDefine what corporate restructuring is and why it occursIdentify commonly used valuation techniques and how they ar

6、e employedDescribe how corporate restructuring creates/destroys value Identify commonly used takeover tactics and defenses and when they are most appropriateDevelop a highly practical “planning based” approach to managing the M&A processIdentify challenges and solutions associated with each phase of

7、 the M&A process Describe advantages and disadvantages of alternative M&A deal structuresDescribe how to plan, structure, and manage JVs, partnerships, alliances, licensing arrangements, equity partnerships, franchises, and minority investments第5頁，共29頁。Current Chapter Learning ObjectivesPrimary obje

8、ctive: What corporate restructuring is and why it occursSecondary objective: Provide students with an understanding ofM&A as a form of corporate restructuringAlternative ways of increasing shareholder valueM&A activity in an historical contextThe primary motivations for M&A activityKey empirical fin

9、dingsPrimary reasons some M&As fail to meet expectations第6頁，共29頁。M&As as a Form of Corporate RestructuringRestructuring ActivityCorporate RestructuringBalance SheetAssets OnlyFinancial Restructuring Operational RestructuringPotential StrategyRedeploy AssetsMergers, Break-Ups, & Spin-OffsAcquisitions

10、, divestitures, etc.Increase leverage to lower cost of capital or as a takeover defense; share repurchasesDivestitures, widespread employee reduction, or reorganization第7頁，共29頁。Alternative Ways of Increasing Shareholder ValueSolo venture (AKA “going it alone” or “organic growth”)Partnering (Marketin

11、g/distribution alliances, JVs, licensing, franchising, and equity investments)Mergers and acquisitionsMinority investments in other firmsAsset swapsFinancial restructuringOperational restructuring第8頁，共29頁。Discussion QuestionsWhat factors do you believe are most likely to impact senior managements se

12、lection of one strategy (e.g., solo venture, M&A) to increase shareholder value over the alternatives? Be specific.In your opinion, how might the conditions of the business (e.g., profitability) and the economy affect the choice the strategy?第9頁，共29頁。Motivations for M&AStrategic realignmentTechnolog

13、ical changeDeregulationSynergyEconomies of scale/scopeCross-sellingDiversification (Related/Unrelated)Financial considerationsAcquirer believes target is undervaluedBooming stock marketFalling interest ratesMarket powerEgo/HubrisTax considerations第10頁，共29頁。Illustrating Economies of ScalePeriod 1: Fi

14、rm A (Pre-merger)Assumptions:Price = $4 per unit of output soldVariable costs = $2.75 per unit of outputFixed costs = $1,000,000Firm A is producing 1,000,000 units of output per yearFirm A is producing at 50% of plant capacityProfit = price x quantity variable costs fixed costs = $4 x 1,000,000 - $2

15、.75 x 1,000,000 - $1,000,000 = $250,000Profit margin (%)1 = $250,000 / $4,000,000 = 6.25%Fixed costs per unit = $1,000,000/1,000,000 = $1Period 2: Firm A (Post-merger)Assumptions:Firm A acquires Firm B which is producing 500,000 units of the same product per yearFirm A closes Firm Bs plant and trans

16、fers production to Firm As plantPrice = $4 per unit of output soldVariable costs = $2.75 per unit of outputFixed costs = $1,000,000Profit = price x quantity variable costs fixed costs = $4 x 1,500,000 - $2.75 x 1,500,000 - $1,000,000 = $6,000,000 - $4,125,000 - $1,000,000 = $875,000Profit margin (%)

17、2 = $875,000 / $6,000,000 = 14.58%Fixed costs per unit = $1,000,000/1.500,000 = $.67Key Point: Profit margin improvement is due to spreading fixed costs over more units of output.1Margin per unit sold = $4.00 - $2.75 - $1.00 = $.252Margin per units sold = $4.00 - $2.75 - $.67 = $.58第11頁，共29頁。Illustr

18、ating Economies of ScopePre-Merger:Firm As data processing center supports 5 manufacturing facilitiesFirm Bs data processing center supports 3 manufacturing facilitiesPost-Merger:Firm As and Firm Bs data processing centers are combined into a single operation to support all 8 manufacturing facilitie

19、s By combining the centers, Firm A is able to achieve the following annual pre-tax savings:Direct labor costs = $840,000.Telecommunication expenses = $275,000Leased space expenses = $675,000General & administrative expenses = $230,000Key Point: Cost savings due to expanding the scope of a single cen

20、ter to support all 8 manufacturing facilities of the combined firms.第12頁，共29頁。Empirical FindingsAbnormal (or excess) financial returns are those earned by acquirer and target shareholders above or below what would have been earned without a takeover.Around transaction announcement date, abnormal ret

21、urns:1 For target shareholders averaged 25.1% during the 2000s as compared to 18.5% during the 1990sFor acquirer shareholders generally positive averaging about 1-1.5% However, zero to slightly negative for acquirer shareholders for deals involving large public firms and those using stock to pay for

22、 the deal1Positive abnormal returns to acquirer shareholders often are situational and include the following:Target is a private firm or a subsidiary of another firmThe acquirer is relatively small (large firm management may be more prone to hubris)The target is small relative to the acquirerCash ra

23、ther than equity is used to finance the transactionTransaction occurs early in the M&A cycleNo evidence that alternative strategies (e.g., solo ventures, alliances) to M&As are likely to be more successful1These conclusions are based on recent studies using large samples over lengthy time periods in

24、volving U.S., foreign, and cross-border deals (including public and private firms). See J. Netter, M. Stegemoller, and M. Wintoki, 2011 Implications of Data Screens on Merger and Acquisition Analysis: A Large Sample Study of Mergers and Acquisitions, Review of Financial Studies 24 2316-2357 and J. E

25、llis, S. B. Moeller, F.P. Schlingemann, and R.M. Stulz, 2011 Globalization, Governance, and the Returns to Cross-Border Acquisitions, NBER Working Paper No. 16676. 第13頁，共29頁。Primary Reasons Some M&As Fail to Meet ExpectationsOverpayment due to over-estimating synergySlow pace of integrationPoor stra

26、tegy第14頁，共29頁。Discussion QuestionsDiscuss whether you believe current conditions in the U.S. and global markets are conducive to high levels of M&A activity? Be specific.Of the factors potentially contributing to current conditions, which do you consider most important and why?Speculate about what y

27、ou believe will happen to the number of M&As over the next several years in the U.S.? Globally? Defend your arguments.第15頁，共29頁。Application: Xerox Buys ACSIn 2010, Xerox, a slower growing, cyclical an office equipment manufacturer, acquired Affiliated Computer Systems (ACS) for $6.4 billion. With an

28、nual sales of about $6.5 billion, ACS handles paper-based tasks such as billing and claims processing for governments and private companies. With about one-fourth of ACS revenue derived from the healthcare and government sectors through long-term contracts, the acquisition gives Xerox a greater pene

29、tration into markets which should benefit from the 2009 government stimulus spending and 2010 healthcare legislation. There is little customer overlap between the two firms. The sale of services tends to be more stable and offers higher margins than product companies.Previous Xerox efforts to move b

30、eyond selling printers, copiers, and supplies and into services achieved limited success due largely to poor management execution. While some progress in shifting away from the firms dependence on printers and copier sales was evident, the pace was far too slow. Xerox was looking for a way to accele

31、rate transitioning from a product driven company to one whose revenues were more dependent on the delivery of business services.More than two-thirds of ACS revenue comes from the operation of client back office operations such as accounting, human resources, claims management, and other outsourcing

32、services, with the rest coming from providing technology consulting services. ACS would also triple Xeroxs service revenues to $10 billion. Xerox chose to run ACS as a separate standalone business. Discussion Questions: 1.What alternatives to buying ACS do you think Xerox could have considered?2.Why

33、 do you think they chose a merger strategy? (Hint: Consider the advantages and disadvantages of alternative implementation strategies.)3.Speculate as to Xeroxs primary motivations for acquiring ACS?4.How might the decision to manage ACS as a separate business affect realizing the full value of the t

34、ransaction? What other factors could limit the realization of synergy? 第16頁，共29頁。Remembering the Past“Those who do not remember the past are condemned to relive it.” Alexis De Tocqueville第17頁，共29頁。Merger Waves1(Boom Periods)Horizontal Consolidation (1897-1904)Increasing Concentration (1916-1929)The

35、Conglomerate Era (1965-1969)The Retrenchment Era (1981-1989)Age of Strategic Megamerger (1992-2000)Age of Cross Border and Horizontal Megamergers (2003-2007)1Periods characterized by robust increases in the number and value of transactions.第18頁，共29頁。Causes and Significance of M&A WavesFactors contri

36、buting to increasing M&A activity:Shocks (e.g., technological change, deregulation, and escalating commodity prices)Ample liquidity and low cost of capitalOvervaluation of acquirer share prices relative to target share prices Improving business confidenceWhy it is important to anticipate M&A waves:F

37、inancial markets reward firms pursuing promising (often undervalued) opportunities early on and penalize those that follow later in the cycle.Acquisitions made early in the wave often earn substantially higher financial returns than those made later in the cycle.第19頁，共29頁。Horizontal Consolidation (1

38、897-1904)Spurred by Drive for efficiency, Lax enforcement of antitrust lawsWestward migration, and Technological changeResulted in concentration in metals, transportation, and mining industryM&A boom ended by 1904 stock market crash and fraudulent financing第20頁，共29頁。Increasing Concentration (1916-19

39、29)Spurred by Entry of U.S. into WWIPost-war boomBoom ended with1929 stock market crashPassage of Clayton Act which more clearly defined monopolistic practices第21頁，共29頁。The Conglomerate Era (1965-1969)Conglomerates buy earnings streams to boost their share priceOvervalued firms acquired undervalued

40、high growth firmsNumber of high-growth undervalued firms declined as conglomerates bid up their pricesHigher purchase price for target firms and increasing leverage of conglomerates brought era to a close第22頁，共29頁。The Retrenchment Era (1981-1989)Strategic U.S. buyers and foreign multinationals domin

41、ated first half of decadeSecond half dominated by financial buyersBuyouts often financed by junk bondsDrexel Burnham provided market liquidityEra ended with bankruptcy of several large LBOs and demise of Drexel Burnham (Michael Milken)第23頁，共29頁。Age of Strategic Megamerger (1992-2000)Dollar volume of

42、 transactions reached record in each year between 1995 and 20001Purchase prices reached record levels due toSoaring stock marketConsolidation in many industriesTechnological innovation Benign antitrust policiesPeriod ended with the collapse in global stock markets and worldwide recession1The cumulat

43、ive dollar value of M&As during this period in the U.S. was $6.5 trillion, With $3.5 trillion taking place in the last two years.第24頁，共29頁。Age of Cross Border and Horizontal Megamergers (2003 2007)Average merger larger than in 1980s and 1990s, mostly horizontal, and cross borderConcentrated in banki

44、ng, telecommunications, utilities, healthcare, and commodities (e.g., oil, gas, and metals)Spurred byContinued globalization to achieve economies of scale and scope; Ongoing deregulation;Low interest rates; Increasing equity prices, and Expectations of continued high commodity pricesPeriod ended with global credit market meltdown and 2008-2009 recession第25頁，共29