ffm11i21 - Chapter 21 Mergers and Acquisitions Learning...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 21 Mergers and Acquisitions Learning Objectives After reading this chapter, students should be able to: Define the term merger, and list some motives for mergers. Characterize the different types of mergers. Identify the five major “merger waves” that have occurred in the United States. Differentiate between the merger processes in hostile versus friendly takeovers. Briefly explain the need to regulate mergers, and whether states play a role in merger regulation. Determine the value of a target firm using discounted cash flow analysis and the appropriate discount rate. Explain the correct financial reporting treatment for mergers. Discuss the roles investment bankers play in merger transactions. Explain whether corporate acquisitions create value and how the value is shared between the parties. Differentiate between a merger and a corporate alliance. Explain what a leveraged buyout (LBO) is. Define the term divestiture, briefly discuss the major types of divestitures, and give some reasons for divestitures. Chapter 21: Mergers and Acquisitions Learning Objectives 41 Lecture Suggestions In this chapter we discuss mergers, LBOs, and divestitures. Merger rationales, classifications, merger regulation, merger analysis, and the accounting treatment for mergers are also discussed. Finally, we talk about divestitures and the rationale behind them. What we cover, and the way we cover it, can be seen by scanning the slides and Integrated Case solution for Chapter 21, which appears at the end of this chapter solution. For other suggestions about the lecture, please see the “Lecture Suggestions” in Chapter 2, where we describe how we conduct our classes. DAYS ON CHAPTER: 2 OF 58 DAYS (50-minute periods) 42 Lecture Suggestions Chapter 21: Mergers and Acquisitions Answers to End-of-Chapter Questions 21-1 Horizontal and vertical mergers are most likely to result in governmental intervention, but mergers of this type are also most likely to result in operating synergy. Conglomerate and congeneric mergers are attacked by the government less often, but they also are less likely to provide any synergistic benefits. 21-2 A tender offer might be used. Although many tender offers are made by surprise and over the opposition of the target firm’s management, tender offers can and often are made on a “friendly” basis. In this case, management (the board of directors) of the target company endorses the tender offer and recommends that shareholders tender their shares....
View Full Document

This note was uploaded on 02/08/2012 for the course FINANCE MA 502 taught by Professor Chaudhry during the Spring '11 term at Instituto Balseiro.

Page1 / 20

ffm11i21 - Chapter 21 Mergers and Acquisitions Learning...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online