0651 - Specialization in Business Administration Course IV - International Management and Marketing
Subject(s) Diploma Programs
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
Subtitle:Topic 7 - International Mergers and Acquisitions
Instructors:Dr. Christian Herbst, LL.M.(Harvard), Dr. Sascha Hödl, LL.M.
Type:PI
Weekly hours:2
Members (max.):20
Registration period:08/05/08 to 08/19/08
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 - 20 % 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 - 50 % 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.

Contents
Unit Date Contents
1 24.10. Session 1: 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 and Latest Figures and Recent Developments.
•    Economic rationale for M&A - Shareholder Value vs. Corporate Social Responsibility
•    Market entry strategies - Licensing, JV, Acquisitions
•    Forms of M&A Transactions

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.
-    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.
- UBS research focus: M&A: Still a big deal, Nov. 2007 edition.

2 31.10. Session 2: The M&A Transaction Process I

Time: 15:00 – 19:00
Place: Schoenherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna


    Topics:

•    Business Judgement Rule

•    Milestones of M&A Transactions

•    Legal Kick Off Documentation

•    Legal, Tax and Financial Due Diligence

•    Impact of Due Diligence on the M&A Transaction Process

Required Readings:
-    Steven L. Emanuel, The Business Judgment Rule, in Law Outlines - Corporations, p. 179-180; 182.

- Bruner, How a negotiated Deal takes shape, in Applied Mergers & Acquisitions, Wiley Finance, p. 685-702

- David S. Lu, Letters of Intent: Beware of the Unintended, May 2001

- David Washburn, Quick Tips for Negotiating a Great Letter of Intent, June 2001

- Bruner, Due Diligence, In Applied Mergers & Acquisitions, Wiley Financy, p. 3-24

- 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 four documents in class (no detailed reading before class is required):
- Due Diligence request List.
- Letter of Intent
- Confidentiality Agreement

3 7.11. Session 3: The M&A Transaction Process II

Time: 15:00 – 19:00
Place: Schoenherr Rechtsanwälte, Tuchlauben 17, 1014 Vienna


Topics:

•    Share Deal vs. Asset Deal
•    Acquisition Structure
•    Share and Asset Purchase Agreements
•    Regulartory Aspects

Required Readings:
- Reed/Lajoux, Structuring M&A Transactions: General, Tax, and Acquisition Considerations, in The Art of M&A - a Merger Acquisition Buyout Guide, McGraw Hill, 3rd Edition, p. 255-290
- Lajoux/Nesvold, Concluion - 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 Agreement, in The Art of M&A - A Merger Acquisition Buyout Guide, McGraw Hill, 3rd edition, p. 445-501
- Mayer, Franks, Getting the Right Deal To Succeed i Business, FT Mastering Transactions, Part 1, p. 2-3

You will be guided through the following four documents in class (no detailed reading before class is required):
-    Draft Share Purchase Agreement.

4 21.11. 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

Required Readings:

-    Prowse, The Economics of the Private Equity Market, Economic Re-view, 03 Q 1998, p. 21-34.
- Reed/Lajoux, Valuation and Pricing, in The Art of M&A - A Merger Acquisition Buyout Guide, McGraw Hill, 3rd Editio, p. 79-137
- Bruner, Valuing the Highly Levered Firm, Assesing the highly levered transaction, in Applied Mergers & Acquisitions, Wiley Finance, p. 393-423
Kaplan, The Determinants of M&A Success, What Factors Contribute
to Deal Success, KPMG Transaction Services (2007).
- Mayer/Franks, Getting The Right Deal To Succeed in Business, in FT
Mastering Transactions, Part 1, p. 2 – 3.
- Lubián, The Right Price Is Key To A Good Transaction, in FT Mastering
Transactions, Part I, p. 4 – 5.

You will be guided through the following four documents in class (no detailed reading before class is required):
-    Hödl, Country Q&A Austria – Private Equity, PLC Handbook 2007/2008.

5 12.12. 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 Finance,
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.
- Martin Lipton, M&A in 2008, Wachtell, Lipton, Rosen & Katz Newsletter
December 17, 2007.
- Herbst/Hödl, Country Q&A Austria in ICLG To: Mergers and Acquisitions
2007, p. 23 – 30.

You will be guided through the following four documents in class (no detailed reading before class is required):
-    Herbst, Country Q&A Austria in ICLG To: Mergers and Acquisitions 2007, p. 23-30



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