TAILIEUCHUNG - Lecture Fundamentals of corporate finance - Chapter 23: Mergers and acquisitions

This chapter describes the corporate finance of mergers and acquisitions. It shows that the acquisition of one firm by another is essentially a capital budgeting decision, and the NPV framework still applies. Tax, legal, and accounting aspects of mergers are discussed along with more recent developments in areas such as takeover defenses. | Chapter Outline Chapter 23 Mergers and Acquisitions Chapter Organization The Legal Forms of Acquisitions Taxes and Acquisitions Accounting for Acquisitions Gains from Acquisition Some Financial Side Effects of Acquisitions The Cost of an Acquisition Defensive Tactics Some Evidence on Acquisitions Summary and Conclusions CLICK MOUSE OR HIT SPACEBAR TO ADVANCE Irwin/McGraw-Hill copyright © 2002 McGraw-Hill Ryerson, Ltd. How to Make a Merger Work Are there any rules of thumb for merger success? Consider the following. 1. Don’t rush the wedding - do your homework carefully to prevent morning-after surprises. 2. Know what you’re buying - not just the financials, but the corporate culture. 3. Adopt each partner’s best practices - don’t assume the bigger company or the acquirer has all the answers. 4. Be honest with employees about how a merger will affect them - start early and communicate honestly with them. 5. Take the time to do internal recruiting - make sure the managers you want to keep don’t go wandering off to a competitor. Adapted from “How to Make a Merger Work”, Fortune magazine, January 24, 1994. The Mechanics of Mergers & Acquisitions I. Merger Advantages Simplicity (buyer assumes all assets and liabilities) No minority interests Not a taxable event for shareholders Disadvantages All liabilities assumed (including potential litigation) Typically require two thirds of shareholders of both firms to approve Requires post-merger cooperation between each firm’s management The Mechanics of Mergers & Acquisitions (concluded) II. Acquisition of Stock (Tender Offer) Advantage No shareholder (or even management) approval necessary Used for hostile takeover conditions Disadvantage Integration difficult without 100% of shares Requires offering circular and exchange filings III. Acquisition of Assets Advantages Buyer acquires assets with no minority shareholders Only 50% of seller’s shareholders need .

• Tài chính doanh nghiệp
• Corporate finance
• Fundamentals of corporate finance
• Tài chính doanh nghiệp
• Business organization
• Financial management
• Legal forms of acquisitions
• Intermediate corporate finance
• Lecture Intermediate corporate finance
• Corporate valuation
• Value based management
• International corporate finance
• Capital market history
• Raising capital
• Financial leverage
• Financial reporting
• Social welfare
• Forward contracts
• The stock markets
• Basic return concepts
• Portfolio theory
• Bond valuation
• Basic stock valuation
• Accounting for financial management
• Analysis of financial statements
• Financial planning
• Forecasting financial statements
• Capital budgeting
• Decision criteria
• Estimating cash flows
• Real options
• Capital structure decisions
• The levered firm
• Cash management
• Financial distress
• Hedging risk
• Warrants and convertibles
• Principles of corporate finance
• Understanding options
• Valuing options
• Financial analysis
• Financial manager
• Financial institutions