Large impact on mas pitfalls of investors in the

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large impact on M&AS - Pitfalls of investors in the region > lack of adequate data for decisions making > time sensitive and less detailed due diligence investigations - South Africa is seen as the gateway to the rest of Africa – holds 54% of total deal activity M&A Activity in South Africa - Pre 1994 - creation of conglomerates (more than 80% of total market capitalisation on JSE) - ownership of these conglomerates fell in the hands of families (Oppenheimers, Ruperts) - Post 1994 – unbundling of conglomerates, fundamental shift in the mindsets of SA’s richest individuals - South Africa has moved with the international trends - Two key factors for South African M&A growth 1.) Political Stability 2.) Growing Risk Appetite Due Diligence - Referring to “Quick Quiz” on page 10 of the textbook - The acquiring company should investigate the following: The financial state of affairs at the mine (liquidity, solvency, leverage, asset turnover) The size of the uranium resources (does the quantity justify the transaction) Health and safety issues (would it be safe for employees to work on the old mines) Environmental Issues THIS IS A GOOD EXAM QUESTION, LEARN TO DO DUE DILIGENCE! Conclusion - M&As are driven by various strategic motives, such as the desire to grow, reduce costs or diversify - Although M&As are complex transactions, the typical M&A has 5 stages: strategising, organising, structuring the deal, implementation, and post implementation analysis. - Risk of failure is significantly reduced by identifying and managing risk associated with each stage - There are many stakeholders involved in the process, each with a unique role and unique needs that must be considered. - Merger waves have increased in intensity and frequency over the past century 6 | P a g e
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- Foreign investors are very active in Africa and more specifically South Africa since the developing country holds so much promise 7 | P a g e
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  • Fall '19
  • takeover, Target Company

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