0636 - International Mergers & Acquisitions

Subject(s) Diploma Programs

Specialisation in BA EM A: Advanced Topics I - International Marketing and Management
Specialisation in BA EM A: Advanced Topics II - International Marketing and Management
Specialisation in BA EM A: Advanced Topics III - International Marketing and Management
Specialisation in BA EM A: Advanced Topics IV - International Marketing and Management
Specialisation in BA EM A: Advanced Topics V - International Marketing and Management
Specialisation in BA EM A: Advanced Topics VI - International Marketing and Management

Instructors:	Dr. Christian Herbst, LL.M.(Harvard), Dr. Sascha Hödl, LL.M.
Type:	PI
Weekly hours:	2
Members (max.):	20
Registration period:	02/11/10 to 02/19/10

Class objective(s) (learning outcomes)

Mergers & Acquisitions (M&A) are an essential part in the growth of companies. The transactions enable companies to enter new markets quickly and to exploit economies of scale without the need first to capture a high market share.

This course gives students an overview of the basic economic, public policy and legal issues in M&A. Students will learn the principal mechanics of such trans-actions, from the early stages of preliminary screening, due diligence, contract negotiation, regulatory clearances to closing of the deal. Types of transactions covered will include private M&A transactions, public takeovers and private eq-uity transactions.

The course format combines introductory lectures with an effort to encourage student presentations and to simulate classroom discussions. Groups which consist of up to five students will for each session - prepare assignments for in-class presentation. Students are expected to prepare the recommenced reading section and subsequently to participate in discussions in class and to follow reporting on significant M&A transactions in the financial press to be pre-pared to contribute to transaction analysis by discussions in class.

Prerequisites according to degree program

advanced course

Teaching and learning method(s)

Discussion of required readings
Presentation
Discussion of group assignments

Criteria for successful completion

Class participation - 30 % of the grade. Participation in discussions throughout the semester. Further, you are expected to play an active role in the simulated real life negotiations in classroom.

Group Assignment and Presentation - 30 % of the grade. Groups will be formed in the first session. Each group will have to prepare a presentation on a mock transaction and will have to present it to the class.

Final paper - 40 % of the grade. In the final paper (8- 10 pages) you will evaluate a sample transaction under commercial, legal and policy perspectives.
Final paper has to be submitted and has to get a positive mark and in order to pass the course.

Availability of instructor(s) for contact by students

Dr. Christian Herbst, LL.M. (Harvard)
mailto:wu.herbst@schoenherr.at
by arrangement

Dr. Sascha Oliver Hödl, LL.M. (Harvard)
mailto:wu.herbst@schoenherr.at
by arrangement

Miscellaneous

Readings:
A reading package with all relevant readings will be available at the Institute of International Marketing and Management. Students must read the relevant readings before each class.
You will receive an e-Mail as soon as the Reader is available!

Students are also expected to have read part I of the reading package for the first class.

Detailed schedule

Day	Date	Time	Room
Friday	03/12/10	03:00 PM - 07:00 PM	Ort nach Ankündigung
Friday	03/19/10	03:00 PM - 07:00 PM	Ort nach Ankündigung
Friday	03/26/10	03:00 PM - 07:00 PM	Ort nach Ankündigung
Friday	04/23/10	03:00 PM - 07:00 PM	Ort nach Ankündigung
Friday	04/30/10	03:00 PM - 07:00 PM	Ort nach Ankündigung

Contents

Session 1: M & A Transaction in Light of Good Corporate Governance, An Introduction to M & A Transaction Processes

Session 2: Economic and Policy Issues of M & A Transactions

Session 3: Legal Aspects of M & A Transactions

Session 4: Financial Aspects of M & A Transactions; Private Equity Transactions

Session 5: Public Hostile and Friendly Takeovers

Unit	Contents
1	Session 1: M & A Transaction in Light of Good Corporate Governance, An Introduction to M & A Transaction Processes Time: 15:00 19:00 Place: Schoenherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Principles of Good Conduct of Business (Duty of Care, Duty of Loyalty, Potential Liability Traps for Managers) Business Judgment Rule Economic Rationale for M&A - Shareholder Value vs. Corporate Social responsibility Market Entry Strategies - Licensing, Joint Ventures and Acquisitions Forms of M&A Transactions - Private M&A, LBO, MBO, Venture Capital, Private Equity, Public Takeovers Milestones of an M&A Transaction Required Readings: - Keegan/Schlegelmilch, Production Abroad and Strategic Alliances, in Global Marketing Management - A European Perspective, p. 289-309; 313-315. - Brealey/Myers, Mergers, in Principles of Corporate Finance, McGraw Hill, 7th Edition, p. 928-937; 943-955. - Steven L. Emanuel, The Duty of Care and the Business Judgement Rule, p. 171-180; 182-184. - Steven L. Emanuel, The Business Judgment Rule, in Law Outlines -Corporations, p. 179-180; 182. - Steven L. Emanuel, Duty of Loyalty, p.24-28.
2	Session 2: Economic and Policy Issues of M&A Transactions Time: 15:00 19:00 Place: Schoenherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Topics: The M&A Market - History, Latest Figures and Recent Developments Impact of the current financial crisis on the M&A market Legal Kick Off Documentation (Letter of Intent; Confidentiality Agreement) Legal, Tax and Financial Due Diligence (Process; Covered Areas; Risk Analysis) Impact of Due Diligence on M&A Transaction Process (Purchase Price; Reps & Warranties) Required Readings: - Lipton, Mergers: Past, Present and Future, manuscript, February 2001. - Lipton, After the Millennium Bubble Reforming Corporate America and Getting Back to Business, Commercial Lawyer 2003, p. 62-69. - Soros, The game changer, Financial Times, 28 January 2009. - Articles on the financial crisis: (i) Taming the beast, The Economist, 11 Oc-tober 2008. (ii) Gandel, Americas Broken Banks, Time, 9 February 2009. - Rearranging the towers of gold, The Economist, 12 September 2009. - Herlihy et al, Financial Institutions M&A 2009: Convergence, Consolida-tion, Consternation and Complexity in an Industry in Transition, January 2009. - Bruner, How a Negotiated Deal Takes Shape, in Applied Mergers & Acqui-sitions, Wiley Finance, p. 685-702. - David S. Lu, Letters of Intent: Beware of the Unintended, May 2001, p. 1-2. - David Washburn, Quick Tips for Negotiating a Great Letter of Intent, June 2001, p. 1-5. - Bruner, Due Diligence, in Applied Mergers & Acquisitions, Wiley Finance, p. 207-245. - Lajoux/Elson, Conducting Due Diligence: An Overview, in The Art of M&A Due Diligence, p. 3-24. - Lajoux/Elson, The Financial Statements Review, in The Art of M&A Due Diligence, p. 69-82. You will be guided through the following three documents in class (no detailed reading before class is required): - Letter of Intent - Confidentiality Agreement - Due Diligence Request List
3	Session 3: Legal Aspects of M&A Transactions Time: 15:00 19:00 Place: Schoenherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Topics: Share Deal vs. Asset Deal Acquisition Structures Share and Asset Purchase Agreements Regulatory Aspects Structuring of deals in the financial crisis Required Readings: - Lajoux/Nesvold, Conclusion Documenting the Deal, in The Art of M&A Structuring, McGraw Hill, p. 345-372. - Reed/Lajoux, Negotiating the Letter of Intent and the Acquisition Agree-ment, in The Art of M&A A Merger Acquisition Buyout Guide, McGraw Hill, 3rd Edition, p. 445-501. - Reed/Lajoux, Structuring M&A Transactions: General, Tax, and Accounting Considerations, in The Art of M&A A Merger Acquisition Buyout Guide, McGrawHill, 3rd Edition, p. 255-269. - Wood, Letter from Philip Wood- Allen & Overy Briefing Report: The Phi-losophy of Insolvency Rescues, 5 February 2009. - Near Earth, M&A Deal Terms for 2008/2009. You will be guided through the following document in class (no detailed reading before class is required): - Draft Share Purchase Agreement.
4	Session 4: Financial Aspects of M&A Transactions: Private Equity Transactions Time: 15:00 19:00 Place: Schoenherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Topics: Purchase price determination; Earn out models Acquisition Finance, LBO / MBO Stuctures Leverage buyout transactions Private Equity - Lubián, The Right Price Is Key To A Good Transaction, in FT Mastering Transactions, Part I, p. 4 5. - Reed/Lajoux, Valuation and Pricing, in The Art of M&A A Merger Acquisi-tion Buyout Guide, McGraw Hill, 3rd Edition, p. 79-137. - Bruner, Valuing the Highly Levered Firm, Assessing the Highly Levered Transaction, in Applied Mergers & Acquisitions, Wiley Finance, p. 393-423. - Prowse, The Economics of the Private Equity Market, Economic Review, 03 Q 1998, p. 21-34. - European Private Equity in Review, Mergermarket, August 2009. You will be guided through the following document in class (no detailed reading before class is required): - Hödl, Country Q&A Austria Private Equity, PLC Handbook 2008/09, p.25-24.
5	Session 5: Public Hostile and Friendly Takeovers Time: 15:00 19:00 Place: Schoenherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Topics: Being Public / Capital Market as Market of Corporate Control Case Study - a public takeover Takeover defensive measures Squeeze Out and De-Listing. Required Readings: - Bruner, Auctions in M&A, in Applied Mergers & Acquisitions, Wiley Fi-nance, p.791-803. - Bruner, Hostile Takeovers: Preparing a Bid in Light of Competition and Arbitrage, in Applied Mergers & Acquisitions, Wiley Finance, p.805-823. - Bruner, Takeover Attack and Defense, in Applied Mergers & Acquisitions, Wiley Finance, p. 824-855. - Davidoff, US Perspective- Changing Market Practice in US Takeovers, PLC Cross- border Quarterly, October-December 2008. - Fernández, The Growing Influence of Sovereign Wealth Funds, PLC Cross- border Quarterly, October-December 2008. - Simpson/Corte, Completing Acquisitions after the Credit Crunch: A New Look at the Viability of Exchange Offers and Stock Mergers by Foreign Pri-vate Issuers, ICLG to: Mergers & Acquisitions 2009, p.4-5. You will be guided through the following document in class (no detailed reading before class is required): - Herbst/Hödl, Country Q&A Austria, ICLG to: Mergers and Acquisitions 2009, p. 17 25.

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