IBS211 > 22542 Financial Plan Budget & Model > Group Final: M&A Analysis

Instructions:

As a group, choose the M&A to research.

Each group member must conduct his/her own research to identify the M&A’s strategic considerations and risks. You should focus on the acquirer’s perspective but can include the acquired’s considerations if that adds to the case. Each group member should keep individual research notes in a “View only” google doc linked to the final essay submission.

After individual research has been completed, you must work together as a team to synthesize your information into a case analysis about the strategic rationale behind the merger and whether that rationale was sound. Minimize describing what happened but instead focus on analyzing why things happened the way they did, whether the M&A is a good idea, and what can be done to ensure its success. Make sure to back up all claims with citations/evidence from your group’s research. Select among issues we discussed in class like the following (you may choose your own topics and do not need to analyze all of these):

Valuation of the M&A (Sessions 15 and 16)

Potential synergies that justify the M&A (Session 16)

Capital structure optimization (Sessions 17 and 18)

Segment risk analysis (Session 18)

Financial options used in the M&A transaction (Session 19)

Real options that can justify the M&A (Session 20)

Potential changes in foreign currency risk (Session 21)

Financial markets considerations (Session 22)

Industry and competitive landscape analysis (Session 23)

Competitive positioning and business model analysis (Session 23)

M&A performance and value generation (Session 24)

Corporate Social Responsibility considerations (Session 25)

In an Appendix (not subject to the word count), provide a brief description of the role each team member played in generating this case study along with a link to each group member’s individual research notes in a “View only” google doc.

Graded LO’s:

Your assignment will be graded on 3 LO’s. Two of them will be #bizstrategy and #bizrisk so be sure you tag and provide sufficient analysis and material for grading these two LO’s. Then, be sure to tag a third LO that your group wants to be graded on (if you like, it can be a repeat of #bizstrategy or #bizrisk). All team members will receive the same 3 LO grades. To increase the chance of earning 4’s: focus your paper on analysis and not on describing what happened; be specific, go deep, provide evidence, and quantify using numbers when possible; apply financial metrics, concepts, or frameworks you learned in this or other classes.

Assume your audience is knowledgeable about the accounting/finance concepts we’ve covered in class and is familiar with the case facts. Don’t waste words explaining what synergies are. Jump right into the analysis.

Go deep. When formulating a response, ask why. Then ask why again and justify your explanation. Back up your explanations with evidence. Integrate numbers into your arguments.

**Use no more than two significant digits **for all numbers in the text and exhibits (12%, 3.5%, or 0.46%, not .12480294). Less is more. Displaying too many digits makes numbers hard to read and actually obscures its value and intuition.

All exhibits you create yourself and referenced in your write-up must be included in the write-up itself and be properly formatted. You must also include a link to all your exhibits so that your calculations can be seen and checked (only those exhibits that appear in the write-up and are explicitly discussed will be assessed). Place your link at the very beginning of the write-up and be sure to grant your professor and peer tutors viewing privileges. Follow these guidelines (e.g. avoid including numbers in a calculation cell but instead, reference inputs/assumptions cells that do contain numbers; use black text for calculations and blue text for inputs).

Check your spelling and grammar. Poor writing conveys carelessness and unprofessionalism.

Tag 3 LO’s. Two of them must be #bizstrategy and #bizrisk, and a third can be a LO of your choice (can be a repeat of #bizstrategy or #bizrisk).

Help sheet for the assignment due Friday, May 3, 2024
by 11:00pm
For this assignment, you will produce a case study regarding a merger or acquisition of
two renowned global companies within the past 15 years (for example, Disney and
Pixar, Facebook and WhatsApp). In this assignment, you will work in pre-assigned
groups (3 or 4 members each). The groups are assigned automatically on Forum.
Please check the names of the other students who are with you.
Instructions:
1. As a group, choose the M&A to research.
Hint: decide within your group on two M&A deals that were concluded within the past 15
years that are interesting to you and that you could work on for Assignment 4. Rank the
M&As as (1) – a preferred deal and (2) – a secondary deal and send the list of 2 deals to
professor’s e-mail: ivan.stetsyuk@zu.ac.ae . If you are the first one to send me deal (1),
I will confirm that you can work on it as a team. Otherwise, I will confirm that you will
work on the secondary deal (2). If both deals have already been chosen by other
students before you sent me the e-mail with your choices, I will ask you to choose and
send me the list of two different M&A deals again.
2. Each group member must conduct his/her own research to identify the M&A’s
strategic considerations and risks. You should focus on the acquirer’s
perspective but can include the acquired’s considerations if that adds to the case.
Each group member should keep individual research notes in a “View only”
google doc linked to the final essay submission.
Hint: meet as a group and allocate at least one topic of research on the M&A
assignment to one of the students in your team. See the list of 12 topics in the following
Section (3). For example, if the team comprises of 4 students, it can allocate 4 topics to
4 students in the following way: to student 1 allocate the following topic: “Valuation of
the M&A”; to student 2 – the following topic: “Potential synergies that justify the
acquisition”; to student 3 – the following topic: “Industry and competitive landscape
analysis”; and to student 4 – the following topic: “Segment risk analysis”.
Note, while it is an individual work at this stage and should be uploaded online to
Google doc in order to show that every student did their fair share of work, the ultimate
goal is to incorporate all individual work in one pdf document in the next step. Hence,
the individual work of all students will be synthesized in one document, edited,
augmented with more relevant materials, and subsequently submitted as one pdf file of
the Assignment 4, as the next Section (3) explains.
3. After individual research has been completed, you must work together as a team
to synthesize your information into a case analysis about the strategic rationale
behind the merger and whether that rationale was sound. Minimize describing
what happened but instead focus on analyzing WHY things happened the way
they did, whether the M&A is a good idea, and what can be done to ensure its
success. Make sure to back up all claims with citations/evidence from your
group’s research. Select among issues we discussed in class like the following
(you may choose your own topics and do not need to analyze all of these):
1. Valuation of the M&A (Sessions 15 and 16)
2. Potential synergies that justify the M&A (Session 16)
3. Capital structure optimization (Sessions 17 and 18)
4. Segment risk analysis (Session 18)
5. Financial options used in the M&A transaction (Session 19)
6. Real options that can justify the M&A (Session 20)
7. Potential changes in foreign currency risk (Session 21)
8. Financial markets considerations (Session 22)
9. Industry and competitive landscape analysis (Session 23)
10. Competitive positioning and business model analysis (Session 23)
11. M&A performance and value generation (Session 24)
12. Corporate Social Responsibility considerations (Session 25)
Hint: While you can choose several sections from the list of topics above for the M&A
deal of your choice, you can add more topics and other relevant materials that might be
interesting in light of what’s happening in any particular M&A.
4. In an Appendix (not subject to the word count), provide a brief description of the
role each team member played in generating this case study along with a link to
each group member’s individual research notes in a “View only” google doc.
Hint: It is a good idea to organize your work that follows a logical structure. See an
example of a table of contents below:
Table of contents
1- Introduction
2- Motives of the acquisition
3- Valuation of the M&A
4- Potential synergies that justify the acquisition
5- Industry and competitive landscape analysis
6- Segment risk analysis
7- Conclusion
8- References
9- Appendix
Note that the points 3, 4, 5, and 6 are the same as the ones we chose for a hypothetical
group as an example in the document above. However, several points will most likely be
different in your M&A analysis, depending on what matters most (in your view) in the
M&A of your choice. It is a subjective decision how you want to organize the Table of
contents and what you want to discuss in detail. For example, one might want to include
“Competitive positioning and business model analysis” when discussing M&A that was
mostly driven by the threat of competitors overtaking the the target company (e.g., when
Facebook acquired WhatsApp). In different M&As, other considerations might be more
important and should be discussed instead.
Graded LO’s:
Your assignment will be graded on 3 LO’s. Two of them will be #bizstrategy and #bizrisk
so be sure you tag and provide sufficient analysis and material for grading these two
LO’s. Then, be sure to tag a third LO that your group wants to be graded on (if you like,
it can be a repeat of #bizstrategy or #bizrisk). All team members will receive the same 3
LO grades. To increase the chance of earning 4’s: focus your paper on analysis and not
on describing what happened; be specific, go deep, provide evidence, and quantify
using numbers when possible; apply financial metrics, concepts, or frameworks you
learned in this or other classes.
If you have any questions about this assignment, please email the professor.
They will try to respond within a day or two.
Hint: Before sending your question, it is a good idea to re-read this document, the
description of the assignment, or search for an answer online. Note that the professor
will neither grade nor evaluate your assignment before it is due.