Chapter-2收购、兼并和重组课后题目

RegulatoryConsiderationsCharacterisdoingtherightthingwhennooneislooking.—J.C.WattsExhibit1:CourseLayout:Mergers,Acquisitions,andOtherRestructuringActivitiesPartIV:DealStructuringandFinancingPartII:M&AProcessPartI:M&AEnvironmentCh.11:PaymentandLegalConsiderationsCh.7:DiscountedCashFlowValuationCh.9:FinancialModelingTechniquesCh.6:M&APostclosingIntegrationCh.4:BusinessandAcquisitionPlansCh.5:SearchthroughClosingActivitiesPartV:AlternativeBusinessandRestructuringStrategiesCh.12:Accounting&TaxConsiderationsCh.15:BusinessAlliancesCh.16:Divestitures,Spin-Offs,Split-Offs,andEquityCarve-OutsCh.17:BankruptcyandLiquidationCh.2:RegulatoryConsiderationsCh.1:MotivationsforM&APartIII:M&AValuationandModelingCh.3:TakeoverTactics,Defenses,andCorporateGovernanceCh.13:FinancingtheDealCh.8:RelativeValuationMethodologiesCh.18:Cross-BorderTransactionsCh.14:ValuingHighlyLeveragedTransactionsCh.10:PrivateCompanyValuationCurrentChapterLearningObjectivesPrimaryobjective:ToenablestudentstounderstandthekeyelementsofselectedfederalandstateregulationsapplicabletoM&ASecondaryobjective:Providestudentswithanunderstandingof Pre-notificationanddisclosurerequirementsofcurrentsecurityandantitrustlegislationHowdecisionsaremadeinsecurityandantitrustenforcementagenciesHowenvironmental,laborandbenefitlawsaffectM&AsKeyelementsoftheSarbanes-OxleylegislationFederalSecuritiesLawsSecuritiesAct(1933)SecuritiesExchangeAct(1934)Section13Section14WilliamsAct(1968)Section13DRequiresregistrationofpubliclyofferedsecuritiesEmpowersSECtorevokeregistrationDefinescontent&frequencyofSECfilingsDefinesproxydisclosurerequirementsRegulatestenderoffersDefinesdisclosurerequirementsSummaryofRegulatoryPre-NotificationFilingRequirementsWilliamsActSchedule13DmustbefilledwiththeSECwithin10daysofacquiring5%ofstockinanotherfirm.Schedule14D-1mustbefiledwiththeSECfortenderoffersTenderoffersmuststayopenaminimumof20businessdaysHart-Scott-RodinoActFilingnecessarywithFTCwhenbuyerpurchasesassetsorsecurities>$63.4millionorbuyerorsellerhasannualsalesorassets≥$126.9millionandotherpartyhassalesorassets≥$12.7million.ThesethresholdsincreasedannuallybychangeinGDPimplicitpricedeflator30daywaitingperiodbeforetransactioncanbecompletedFederalAntitrustLawsShermanAct(1890)Section1Section2ClaytonAct(1914)Celler-KefauverAct(1914)HartScottRodinoAntitrustImprovementAct(1976)EstablishescriminalpenaltiesforrestraintoftradeMakesmergerscreatingmonopoliesillegalAppliestofirmsalreadydominantinservedmarkets

CreatedFTCAmendedClaytonActtoincludeassetaswellasstockpurchasesRequireswaitingperiodbeforetransactioncanbecompletedDiscussionQuestionsWhatwasthemotivationfortheFederalSecuritiesActsof1933and1934?WhatwastherationalefortheWilliamsAct?WhatwasthepurposeoftheHart-Scott-RodinoAct?StateM&ALawsAnti-takeoverLawsAntitrustLawsDefineconditionsunderwhichachangeincorporateownershipcantakeplace.SimilartofederallawsStatesmaysuetoblockmergersevenifnotchallengedbyfederalregulatorsOtherApplicableLegislationIndustryspecificlawsEnvironmentallaws(federalandstate)Laborandbenefitlaws(federalandstate)ApplicableforeignlawsBanking,communications,railroads,defense,insurance,andpublicutilitiesDefinedisclosurerequirementsDefinedisclosurerequirementsCross-bordertransactionssubjecttolawsofcountriesinwhichparticipantshaveoperationsNavigatingAntitrustLaws

(HorizontalMergers)Step1:Definemarketanddetermineconcentration.Herfindahl-HirschmanIndexStep2:Determinepotentialadversecompetitiveeffectsofmergers.CoordinatedinteractionDifferentiatedproductsSimilarityofsubstitutesStep3:Identifyentrybarriers.Proprietarytechnology,patents,governmentregulations,investmentrequirements,orexclusiveownershipofnaturalresources.Step4:Identifypotentialefficienciesresultingfrombusinesscombinations.Step5:Assesscontinuedviabilityoffirmwithoutmerger.NavigatingAntitrustLaws

(VerticalMergers)StepsdescribedforhorizontalmergersalsoapplytoverticalmergersRegulatorsunlikelytochallengeverticalmergersunless RelevantmarkethighlyconcentratedMergerlimitsaccessbyotherstoakeysupplierNavigatingAntitrustLaws

(CollaborativeEfforts)AlliancesandJVsdonotgenerallyrequireapprovalofregulatoryauthoritiesifThecombinedstrengthofpartnersdoesnotresultinadominantmarketshareintheglobalmarketfortheproductorserviceSmallercompaniesnotholdingdominantmarketsharesareunaffectedAccesstokeyresourcesbycompetitorsisnotrestrictedPricingpracticesorcustomerallocationamongpartnersdoesnotunreasonablyrestricttradeStateAnti-takeoverLawsFairpriceprovisionsrequirethatalltargetshareholdersreceivethesamepricewhentendersharesBusinesscombinationprovisionsprecludesaleofassetsforaspecificperiodfollowingbuyout,therebyinhibitingfinancingofpurchasepriceCash-outprovisionsrequireacquirerspurchasingmorethanastipulatedamountoftargetstocktooffertopurchase100%ofremainingstockatsameprice.SharecontrolprovisionsrequireacquirerswhosepurchasesexceedsomethresholdtogetapprovalofshareholdersowninglargeblocksoftargetstockbeforeproceedingwithmergerStateAntitrustLawsStatesgrantedincreasedantitrustpoweraspartofHart-Scott-RodinoActof1976PowersoftensimilartofederallawsStateshaverighttosuetoblockmergerstheyconsideranti-competitive,eveniftheDoJorFTCdonotchallengethemSarbanes-OxleyBill(7/31/02)CreatedPublicCompanyAccountingOversightBoardwhoseresponsibilitiesinclude: --Registeringpublicaccountingfirms --Establishingauditingstandards --EstablishingcodeofconductProhibitsaccountingfirmsfromofferingcertainnon-auditingservices(e.g.,informationtechnology)RequiresauditcommitteestoconsistofindependentdirectorsRequiresCEOs/CFOstocertifyfinancialstatementsProvidesfordisclosureofallmaterialoff-balancesheettransactionsIncreasescriminalpenaltiestoincludeprisonsentenceofupto20yearsDodd-FrankActof2010:Governance&ExecutiveCompensationSayonPay:Inanonbindingvote,shareholdersmayvoteonexecutivepayevery3yrs.SayonGoldenParachutes(executiveseverancepackages):ProxystatementsseekingshareholderapprovalofM&Asorsaleofmostofafirm’sassetsmustdisclosepayagreementswithtargetoracquirerexecutivesClawbacks:Publicfirmsmustdisclosemechanismsforrecoveringincentivepaypaidduring3-yrspriortoearningsrestatements.ProxyAccess:SEChasauthoritytorequirepublicfirmstoincludenomineessubmittedbyshareholdersinproxymaterialsBrokerDiscretionaryVoting:StockexchangesmustprohibitbrokersfromvotingshareswithoutdirectionfromownersinelectionofdirectorsandexecutivecompensationDodd-FrankActof2010:SystemicRegulationandEmergencyPowersFinancialStabilityOversightCouncil(FSOC):MonitorsU.S.financialmarketstoidentifybanksandnonbankbanksexhibiting“systemic”risk.NewFedBank/NonbankSupervisoryPowers:Banks/nonbankswithtotalassets≥$50billionmustSubmitplansfortheirrapiddissolutionineventoffailureLimittheircreditexposureinanyunaffiliatedfirmto25%ofitscapitalConductsemiannualstressteststodeterminecapitaladequacyProvideadvancenoticeofintenttobuyvotingsharesinfinancialfirmsLeverageLimitations:Fedmayrequirebankswithassets≥$50billiontomaintaindebt-to-equityratioofnomorethan15to1.SizeLimitations:Nobankornonbankcanholddeposits>10%ofdepositsnationwide;doesnotapplytomergersinvolvingfailingbanks.FDICGuarantyPowers:MayguarantyliabilitiesofsolventbanksifFSOCandFeddetermineappropriatetodoso.OrderlyLiquidationAuthority:FDICmayseizeandliquidatebanksthreateningU.S.financialstabilityNewBankCapitalRequirements:Atdiscretionofregulators.Dodd-FrankActof2010:

CapitalMarketsOfficeofCreditRatings:Setsrulesfortransparency,conductsauditsandmakesiteasiertosueratingagencies.Securitization:Issuersofasset-backedsecuritiesmustretainaninterestofatleast5%ofanysecuritysoldtothirdparties.HedgeandPrivateEquityFundRegistration:MustregisterwithSECasinvestmentadvisorsifassets≥$100;thosewith<$100millionsubjecttostateregulation.ClearingandTradingofOTCDerivatives:Mustbetradedonformalexchangestoproviderealtimedatareportingtomarketparticipants.Dodd-FrankActof2010:

FinancialInstitutionsVolckerRule:Prohibitsinsuredbanksfrombuyingandsellingsecuritieswiththeirownmoney(i.e.,proprietarytrading)orsponsoringorinvestinginhedgefundsorprivateequityfunds;banksmaydosoiftheyhavenocontroloverfunds.ConsumerFinancialProtectionBureau:WritesrulesgoverningfinancialinstitutionsofferingconsumerfinancialproductsFederalInsuranceOffice:Monitorsinsuranceindustryandrecommendswhichfirmsshouldbeconsideredsystemicallyimportant.DiscussionQuestionsDoyoubelievethatcurrentM&Aregulationsaresufficienttominimizeabuse?Explainyouranswer.ArethereotherwaysinwhichyoubelievethatM&Asshouldberegulated?Bespecific.3.HowdoyoubelievetheSarbanes-OxleyActwillimpactthenumberofinitialpublicofferingsandthenumberoffirmsconve