Many executives say they use M&A as a means to consolidate or expand the market position of their firm or increase its production efficiency. Most mergers and acquisitions, however, fail to create value, leading to the so-called ‘merger paradox’. By adopting a multidisciplinary and institutional perspective, this course aims to increase the understanding of merger determinants and effects, discusses key topics for value creation, and concludes with policy assessments. In addition, the participants will work on their negotiation skills during a workshop.
This course deals with the economic, legal and financial aspects of Mergers & Acquisitions (M&A). The lectures will be given by reputable professors, as well as private equity fund managers, investment bankers, and lawyers who are specialized in M&A.
According to the merger market, the global M&A deal volume reached a 7-year high of $934.2 billion in the second quarter of 2014, resulting in a 64%-increase compared to the same period last year and a 70%-increase compared to the second quarter of 2012 (Bloomberg M&A Financial Advisory League Tables, 2014). Major M&A transactions often appear in the headlines of newspapers. Notable examples for this are the unfriendly takeover bid of Mexico’s América Móvil for the Dutch telecom provider KPN as well as Apple’s successful acquisition of Beats Electronics, a company partly owned by the famous rapper Dr. Dre. Moreover, many executives deal with smaller M&A transactions on a daily basis. Many of these executives would tell you that they use M&A as a way to consolidate or expand the market position of their firms or to increase their efficiency. Yet, most mergers and acquisitions repeatedly fail to generate economic value. This is what some experts call the ‘merger paradox’.
The explosive growth in the number, size, and complexity of mergers and acquisitions during the latter part of the 1990s and between 2003-2008 has demonstrated how ingrained this way of doing business has become in the global business community. Interestingly, an M&A outburst is always followed by a similar move, but in the opposite direction: downwards. Many acquirers subsequently pursue spin-offs or split-ups. These dynamics form the frame of a course that contributes to understanding the position of firms as well as authorities.
On Monday, prof. Oostwouder and prof. Luigi Pinna will introduce you to the both the legal and the economic side of Mergers and Acquisitions. After this, prof. Luigi Pinna will deal with the valuation of (assets of) companies. In the following four days, the lecturers will deal in a multidisciplinary and interactive way with topics that are key to managing M&A. The second day focuses on pre-acquisition requirements such as due diligence investigations, letter of intent and future organizational, legal structuring of the target or even parent and strategy. The Share Purchase Agreement, post-acquisition governance of the target, successful exit strategies (with the help of instruments like “sweet equity” and “ratchets”) are taken up on the third day. With the knowledge gained in the first three days, the participants of the course will be well-prepared for the lectures about the bigger fish in the pond, the larger than 100 million euro transactions: public takeover bids (day four). In the morning of the last day, the students will participate in a negotiation training workshop following the Harvard Principled Negotiation method. The afternoon of the last day will be reserved for student presentations of their papers on major M&A transactions in their home country and for the exams for students which need a grade.
Housing through Utrecht Summer School
prof. dr. Wilco J. Oostwouder
P: +31 (0)6 229 38 313