Mergers, Acquisitions, and Other Restructuring Activities

Mergers, Acquisitions, and Other Restructuring Activities

An Integrated Approach to Process, Tools, Cases, and Solutions

6th Edition - August 22, 2011

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  • Author: Donald DePamphilis
  • eBook ISBN: 9780123854865

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Description

Two strengths distinguish this textbook from others.  One is its presentation of subjects in the contexts where they occur.  Students see different perspectives on subjects and learn how complex and dynamic the mergers and acquisitions environment is.  The other is its use of current events.  Of its 72 case studies, 3/4 are new or have been updated.  The implications of Dodd-Frank and US Supreme Court rulings affecting the Sarbanes-Oxley Act, among other regulatory changes, are developed to enhance teaching and learning experiences.  Other improvements to the 6th edition have shortened and simplified chapters, increased the numbers and types of pedagogical supplements, and expanded the international appeal of examples.  With a renewed focus on empirical  and quantitative examples, the 6th edition continues to demonstrate how people work together on mergers and acquisitions and why the actions of specific individuals have far-reaching implications.

Key Features

  • Presents an integrated approach to the activities involved in mergers, acquisitions, business alliances, and corporate restructurings.
  • All chapters have been revised, updated, and contain new content, and 14 include more extensive changes. Structural revisions make chapters more streamlined, shorter, and less complex.
  • Case studies cover a dozen industries, and 75% are new or have been updated. All include discussion questions and answers. 

Readership

Undergraduate and graduate students worldwide working on mergers & acquisitions, corporate restructuring, business strategy, management, and entrepreneurship.

Table of Contents

  • Dedication

    List of Business Case Studies

    Preface

    Acknowledgments

    About the Author

    PART I. The Mergers and Acquisitions Environment

    Introduction

    Chapter 1. Introduction to Mergers and Acquisitions

    Inside M&A: dell moves into information technology services

    Chapter overview

    Mergers and Acquisitions as Change Agents

    Why Mergers and Acquisitions Happen

    Merger and acquisition waves

    Why It Is Important to Anticipate Merger Waves

    Alternative forms of corporate restructuring

    Friendly versus hostile takeovers

    The role of holding companies in mergers and acquisitions

    The role of employee stock ownership plans in M&As

    Business Alliances as Alternatives to Mergers and Acquisitions

    Participants in the Mergers and Acquisitions Process

    Alternative investors and lenders

    Activist Investors and M&A Arbitrageurs

    Do M&As pay off for shareholders, bondholders, and society?

    Why some M&As fail to meet expectations

    Long-term performance

    Some things to remember

    Chapter business cases

    Chapter 2. Regulatory Considerations

    Inside M&A: The limitations of regulation and the lehman brothers meltdown

    Chapter overview

    Federal securities laws

    Antitrust laws

    Dodd-frank wall street reform and consumer protection act

    State Regulations Affecting Mergers and Acquisitions

    National Security-Related Restrictions on Direct Foreign Investment in the United States

    The U.S. foreign corrupt practices act

    Fair disclosure (regulation FD)

    Regulated Industries

    Environmental laws

    Labor and benefit laws

    Cross-border transactions

    Some Things to Remember

    Chapter Business Cases

    Chapter 3. The Corporate Takeover Market

    Inside M&A: kraft sweetens its offer to overcome cadbury's resistance

    Chapter overview

    Alternative models of corporate governance

    Factors that affect corporate governance

    Alternative takeover tactics in the corporate takeover market

    What makes the aggressive approach successful?

    Other tactical considerations

    Developing a bidding or takeover strategy

    Alternative takeover defenses in the corporate takeover market

    The impact of takeover defenses on shareholder and bondholder value

    Some things to remember

    Chapter business cases

    PART II. The Mergers and Acquisitions Process: Phases 1 through 10

    Introduction

    Chapter 4. Planning: Developing Business and Acquisition Plans

    Inside M&A: Nokia's Gamble to Dominate the Smartphone Market Falters

    Chapter Overview

    A Planning-Based Approach to M&As

    Phase 1: Building the Business Plan

    The Business Plan as a Communication Document

    Phase 2: Building the Merger–Acquisition Implementation Plan

    Some Things to Remember

    Chapter Business Cases

    Chapter 5. Implementation: Search through Closing

    Inside M&A: bank of america acquires merrill lynch

    Chapter overview

    Phase 3: the search process

    Phase 4: the screening process

    Phase 5: first contact

    Phase 6: negotiation

    Phase 7: developing the integration plan

    Phase 8: closing

    Phase 9: implementing postclosing integration

    Phase 10: conducting a postclosing evaluation

    Some things to remember

    Chapter business cases

    Chapter 6. Integration

    Inside M&A: general electric's water business fails to meet expectations

    Chapter overview

    The role of integration in successful M&As

    Viewing integration as a process

    Integrating business alliances

    Some things to remember

    Chapter business cases

    PART III. Merger and Acquisition Valuation and Modeling

    Introduction

    Chapter 7. A Primer on Merger and Acquisition Cash-Flow Valuation

    Inside M&A: the importance of distinguishing between operating and nonoperating assets

    Chapter overview

    Required returns

    Analyzing risk

    Calculating free cash flows

    Applying income or discounted-cash-flow methods

    Valuing firms subject to multiple growth periods

    Valuing firms under special situations

    Using the enterprise method to estimate equity value

    Valuing nonoperating assets

    Putting it all together

    Some things to remember

    Chapter business cases

    Chapter 8. Applying Relative, Asset-Oriented, and Real-Option Valuation Methods to Mergers and Acquisitions

    Inside M&A: a real-options perspective on microsoft's dealings with Yahoo!

    Chapter overview

    Applying relative-valuation (market-based) methods

    Applying asset-oriented methods

    The replacement cost method

    Valuing the firm using the weighted-average method

    Analyzing mergers and acquisitions in terms of real options

    Determining when to use the different approaches to valuation

    Which valuation methods are actually used in practice

    Some things to remember

    Chapter business cases

    Chapter 9. Applying Financial Modeling Techniques

    Inside M&A: HP buys EDS—the role of financial models in decision making

    Chapter overview

    Limitations of financial data

    The model-building process

    Using financial models in support of M&A negotiations

    Alternative applications of M&A financial models

    Some things to remember

    Chapter business cases

    Chapter 10. Analysis and Valuation of Privately Held Companies

    Inside M&A: cashing out of a privately held enterprise

    Chapter overview

    Demographics of privately held businesses

    Governance issues in privately held and family-owned firms

    Challenges of valuing privately held companies

    Process for valuing privately held businesses

    Step 1: adjusting financial statements

    Step 2: applying valuation methodologies to privately held companies

    Step 3: developing discount (capitalization) rates

    Step 4: applying control premiums, liquidity, and minority discounts

    Reverse mergers

    Using leveraged employee stock ownership plans to buy private companies

    Empirical studies of shareholder returns

    Some things to remember

    Chapter Business Cases

    PART IV. Deal-Structuring and Financing Strategies

    Introduction

    Chapter 11. Structuring the Deal

    Inside M&A: pfizer acquires wyeth labs despite tight credit markets

    Chapter overview

    The deal-structuring process

    Form of acquisition vehicle and postclosing organization

    Legal form of the selling entity

    Form of payment or total consideration

    Managing risk and closing the gap on price

    Using collar arrangements to preserve shareholder value

    Form of acquisition

    Some things to remember

    Chapter business cases

    Chapter 12. Structuring the Deal

    Inside M&A: continued consolidation in the generic pharmaceuticals industry

    Chapter overview

    General tax considerations and issues

    Taxable transactions

    Tax-free transactions

    Other tax considerations affecting corporate restructuring

    Financial reporting of business combinations

    Impact of purchase accounting on financial statements

    International accounting standards

    Recapitalization accounting

    Some things to remember

    Chapter business cases

    Chapter 13. Financing Transactions

    Inside M&A: Kinder Morgan Buyout Raises Ethical Questions

    Chapter Overview

    Characterizing Leveraged Buyouts

    How do LBOS create value?

    When Do Firms Go Private?

    Financing Transactions

    Common Forms of Leveraged Buyout Deal Structures

    Prebuyout and Postbuyout Shareholder Returns

    Using DCF Methods to Value Leveraged Buyouts

    LBO Valuation and Structuring Model Basics

    Some Things to Remember

    Chapter Business Cases

    PART V. Alternative Business and Restructuring Strategies

    Introduction

    Chapter 14. Joint Ventures, Partnerships, Strategic Alliances, and Licensing

    Inside M&A: microsoft partners with yahoo! —an alternative to takeover?

    Chapter overview

    Motivations for business alliances

    Critical success factors for business alliances

    Alternative legal forms of business alliances

    Strategic and operational plans

    Resolving business alliance deal-structuring issues

    Empirical findings

    Some things to remember

    Chapter business cases

    Chapter 15. Alternative Exit and Restructuring Strategies

    Inside M&A: Bristol-Myers Squibb Splits off the Rest of Mead Johnson

    Chapter Overview

    Commonly Stated Motives for Exiting Businesses

    Divestitures

    Spin-Offs

    Equity Carve-Outs

    Split-Offs and Split-Ups

    Tracking, Targeted, and Letter Stocks

    Voluntary Liquidations (Bust-Ups)

    Comparing Alternative Exit and Restructuring Strategies

    Choosing among Divestiture, Carve-Out, and Spin-Off Restructuring Strategies

    Determinants of Returns to Shareholders Resulting from Restructuring Strategies

    Some Things to Remember

    Chapter Business Cases

    Chapter 16. Alternative Exit and Restructuring Strategies

    Inside M&A: calpine emerges from the protection of bankruptcy court

    Chapter overview

    Business failure

    Voluntary settlements with creditors outside of bankruptcy

    Reorganization and liquidation in bankruptcy

    Analyzing strategic options for failing firms

    Failing firms and systemic risk

    Predicting corporate default and bankruptcy

    Valuing distressed businesses

    Empirical studies of financial distress

    Some things to remember

    Chapter business cases

    Chapter 17. Cross-Border Mergers and Acquisitions

    Inside M&A: inbev buys an american icon for $52 billion

    Chapter overview

    Distinguishing between developed and emerging economies

    Globally integrated versus segmented capital markets

    Motives for international expansion

    Common international market entry strategies

    Structuring cross-border transactions

    Financing cross-border transactions

    Planning and implementing cross-border transactions in emerging countries

    Valuing cross-border transactions

    Empirical studies of financial returns to international diversification

    Some things to remember

    Chapter business cases

    Glossary

    Index

Product details

  • No. of pages: 784
  • Language: English
  • Copyright: © Academic Press 2011
  • Published: August 22, 2011
  • Imprint: Academic Press
  • eBook ISBN: 9780123854865

About the Author

Donald DePamphilis

Donald DePamphilis
Donald M. DePamphilis has a Ph.D. in economics from Harvard University and has managed more than 30 acquisitions, divestitures, joint ventures, minority investments, as well as licensing and supply agreements. He is Emeritus Clinical Professor of Finance at the College of Business Administration at Loyola Marymount University in Los Angeles. He has also taught mergers and acquisitions and corporate restructuring at the Graduate School of Management at the University of California, Irvine, and Chapman University to undergraduates, MBA, and Executive MBA students. He has published a number of articles on economic forecasting, business planning, and marketing. As Vice President of Electronic Commerce at Experian, Dr. DePamphilis managed the development of an award winning Web Site. He was also Vice President of Business Development at TRW Information Systems and Services, Director of Planning at TRW, and Chief Economist at National Steel Corporation.

Affiliations and Expertise

Clinical Professor of Finance, Loyola Marymount University, Los Angeles, CA, USA

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