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 transac-tions, 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 equity transactions. The course format combines introductory lectures with an effort to encourage stu-dent 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 prepared to contribute to transaction analysis by discussions in class.

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. Allocation to groups will be e-mailed to participants in advance. 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 in order to pass the course.

wu.herbst@schoenherr.at

Readings: All relevant readings are available online for students. Students must read the relevant readings before each class. Students are thus also expected to have read part I of the reading package for the first class.

Unit	Date	Contents
1	04.03.2011	Place: Schönherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Session 1: Economic and Policy Issues of M&A Transactions An Introduction to M & A Transaction Processes Topics: • The M&A Market - History, Latest Figures and Recent Developments • Impact of the financial crisis on the M&A market • Drivers of Comeback of M&A post financial crisis • Forms of M&A Transactions - Private M&A, LBO, MBO, Venture Capital, Private Equity, Public Takeovers • Milestones of an M&A Transaction • Kick Off Documentation: Letter of Intent; Confidentiality Agreements Required Readings: - The Future of M&A, Merger Market/Merrill Datasite 2011 - 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 October 2008. (ii) Gandel, America’s 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, Consolidation, Consternation and Complexity in an Industry in Transi-tion, January 2009. - Bruner, How a Negotiated Deal Takes Shape, in Applied Mergers & Ac-quisitions, 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. You will be guided through the following two documents in class (no detailed reading before class is required): - Letter of Intent - Confidentiality Agreement
2	11.03.2011	Place. Schönherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Session 2: M & A Transaction in Light of Good Corporate Governance Setting the Stage for an M & A Process Topics: • Principles of Good Conduct of Business (Duty of Care, Duty of Loyalty, Po-tential Liability Traps for Managers) • Business Judgment Rule • Economic Rationale for M&A - Shareholder Value vs. Corporate Social Re-sponsibility • Market Entry Strategies - Licensing, Joint Ventures and Acquisitions • 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: - 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. - 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 document in class (no detailed reading before class is required): - Due Diligence Request List
3	18.03.2011	Place: Schönherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Session 3: Financial Aspects of M&A Transactions; Private Equity Transactions Topics: • Purchase Price Determination • Earn Out Models • Acquisition Finance; LBO / MBO Structures • Leverage Buyout Transactions • Private Equity Required Readings: - 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. 25-34.
4	25.03.2011	Place: Schönherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Session 4: Legal Aspects of M & A Transactions Topics: • Share Deal vs. Asset Deal • Acquisition Structures • Share and Asset Purchase Agreements • Regulatory Aspects • Structuring of deals in the financial crisis • Deal Terms 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. - 2010 European Private Targets M&A Deal Points Study (American Bar As-sociation 2010) You will be guided through the following document in class (no detailed reading before class is required): - Draft Share Purchase Agreement.
5	01.04.2011	Place: Schönherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna Session 5: Public Hostile and Friendly Takeovers 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 2010.