Chapter-4收购、兼并和重组课后题目

DevelopingBusinessandAcquisitionPlans:Phases1&2oftheAcquisitionProcessIfyoudon’tknowwhereyouaregoing,anyroadwillgetyouthere.—AliceinWonderlandExhibit1: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:PrivateCompanyValuationCurrentLearningObjectivesPrimarylearningobjectives:Toprovidestudentswithanunderstandingofahighlypractical“planningbased”approachtomanagingtheacquisitionprocessandtheissuesassociatedwitheachphaseoftheM&AprocessSecondarylearningobjectives:ToprovidestudentswithanunderstandingofhowtoselectthecorrectstrategyfromarangeofreasonablealternativesanddevelopanacquisitionplanTheAcquisitionProcessPre-PurchaseDecisionActivitiesPost-PurchaseDecisionActivitiesPhase1:BusinessPlanPhase2:AcquisitionPlanPhase3:SearchPhase4:ScreenPhase5:FirstContactPhase6:NegotiationPhase7:IntegrationPlanPhase8:ClosingPhase9:IntegrationPhase10:EvaluationPhase1:BusinessPlanIndustry/marketdefinition(Wherehavewechosentocompete?) Example:Automotiveindustry(acollectionofmarkets)PassengercarmarketbysizeandbygeographicareaTruckmarketbysizeandgeographicareaAfter-marketWhyisitimportanttostartbydefiningthetargetmarket?Phase1:BusinessPlanIndustry/marketdefinitionExternalanalysis(customers,currentcompetitors,potentialentrants,substituteproducts,andsuppliers):FiveForcesFrameworkKeyobjective:IdentificationofindustrytrendsandwhethertheyconstituteopportunitiesorthreatsExample:AutomotiveindustryWhatischangingwithrespecttoCustomersbyvehiclesizeandgeographicareaCurrentcompetitorsincludeToyota,Daimler,GM,Ford,etc.PotentialentrantsincludeChina’CherieandIndia’sTataMotorsSubstituteproducts/technologiesforinternalcombustionengineincludehybrids,allelectriccar,hydrogencar,ZipCar,etc.Suppliersincludematerialvendors,lenders,labor,etc.Howwillthesechangesimpactmybusiness?Phase1:BusinessPlanIndustry/marketdefinitionExternalanalysis(customers,currentcompetitors,potentialentrants,substituteproducts,andsuppliers)Internalanalysis(strengthsandweaknessesascomparedtothecompetition)Keyquestions:Doourstrengthsenableustopursueopportunitiesidentifiedintheexternalanalysis?(Google’sacquisitionofMotorolaMobility?)Doourweaknessesmakeusvulnerabletothethreatsidentifiedintheexternalanalysis?(Microsoft’sBingsearchengine?)Example:AutomotiveindustryIfourtargetedcustomervaluesfuelefficiency,doourstrengthsenableustoproducehighqualityfuelefficientcarsbetterthanourcompetition?Towhatextentdoourstrengthshelpussatisfyourcustomers’needsbetterthanthecompetition?Towhatextentdoourweaknessesmakeusvulnerabletolosingcustomers?Phase1:BusinessPlanIndustry/marketdefinitionExternalanalysis(customers,currentcompetitors,potentialentrants,substituteproducts,andsuppliers)Internalanalysis(strengthsandweaknessesascomparedtothecompetition)Opportunities/threats(fromexternalandinternalanalyses)SummarizingstrengthsandweaknessesversusopportunitiesandthreatsusingaSWOTmatrixExample:AmazonOpportunityistobeperceivedasthepreferredonlineretaildepartmentstoreThreatisthatWalmart,BestBuy,andCostcoincreasetheironlinepresenceHypotheticalAmazonSWOTMatrixOpportunity:Tobeperceivedbyinternetusersasthepreferredonline“retaildepartmentstore”Threat:Walmart’s,BestBuy’s,andCostco’sincreasingpresenceontheinternetA’sStrengthsRelativetotheopportunity:BrandrecognitionConvenientonlineorderentrysystemInformationtechnologyinfrastructureFulfillmentinfrastructureforselectedproducts(e.g.,books)Relativetothethreat:Extensiveexperienceinonlinemarketing,advertising,andfulfillmentA’sWeaknessesRelativetotheopportunity:InadequatewarehousingandinventorymanagementsystemstosupportquantumsalesgrowthLimitedexperienceinmerchandisingnon-coreretailproducts(e.g.,electronics)LimitedfinancialresourcesRelativetothethreat:SubstantiallysmallerretailsalesvolumelimitsabilitytoexploitpurchaseeconomiesLimitedfinancialresourcesLimitednamerecognitioninselectedmarkets(e.g.,consumerelectronics)LackofretailmanagementdepthStrategicOptionsSoloventurePartnerAcquireSoloventurePartnerAcquireExitbusinessPhase1:BusinessPlanIndustry/marketdefinitionExternalanalysis(customers,currentcompetitors,potentialentrants,substituteproducts,andsuppliers)Internalanalysis(strengthsandweaknessesascomparedtothecompetition)Opportunities/threats(fromexternalandinternalanalyses)Businessvision/mission(Definesdirectionandprovidesmeansofcommunicatingsuccinctlywithkeystakeholdergroups)Howdowewishtobeperceivedbykeystakeholders?Whatquantifiableobjectiveswillbeusedtodetermineprogressinachievingvision/mission?(e.g.,marketshare,customersurveysindicatinghowweareperceived,etc.)HypotheticalExample:Amazonwishestobeperceivedbyconsumersasthepreferredonlinedepartmentstoreby20XXPhase1:BusinessPlanIndustry/marketdefinitionExternalanalysis(customers,currentcompetitors,potentialentrants,substituteproducts,andsuppliers)Internalanalysis(strengthsandweaknessesascomparedtothecompetition)Opportunities/threats(fromexternalandinternalanalyses)Businessvision/missionBusinessStrategies(cost/price,differentiation,focus,orsomecombination)Whichofthesegenericbusinessstrategiesbestenablesthefirmtoachieveitsvision/missionandobjectives?Phase1:BusinessPlanIndustry/marketdefinitionExternalanalysis(customers,currentcompetitors,potentialentrants,substituteproducts,andsuppliers)Internalanalysis(strengthsandweaknessesascomparedtothecompetition)Opportunities/threats(fromexternalandinternalanalyses)Businessvision/missionBusinessStrategies(cost,differentiation,focus,orsomecombination)Implementationstrategy(selectedfromarangeofoptions)Soloventuresor“goitalone”MergeroracquisitionAlliances(includingJVs,partnerships,andlicensing)MinorityinvestmentsandAssetswapsApplicationDiscusshowyouwoulduseinformationobtainedfromtheexternal,internal,andopportunities/threatsidentificationanalysesconductedduringthebusinessplanningprocesstoselectanappropriatebusinessstrategy.Bespecific.Discusshowyouwouldselecttheappropriateimplementationstrategy.Bespecific.(Hint:Considertheresources—broadlydefined--required/currentlyavailabletoexploitpotentialopportunitiesandthreats.)Phase2:AcquisitionPlan(Howtoimplementtheacquisition)Planobjectives(supporttherealizationofkeybusinessplanobjectives)Howwilltheacquiredfirmenabletheacquiringfirmtobetterrealizeitsvision/missionandbusinessplanobjectives?ExamplesofLinkagesBetweenBusinessandAcquisitionPlanObjectivesBusinessPlanObjectiveAcquisitionPlanObjectiveFinancial:ThefirmwillAchieveratesofreturnthatwillequalorexceeditscostofequityorcapitalby20??Maintainadebt/totalcapitalratioofx%Financialreturns:ThetargetfirmshouldhaveAminimumreturnonassetsofx%Adebt/totalcapitalratio

y%Unencumberedassetsof$zmillionSize:ThefirmwillBethenumberoneortwomarketshareleaderby20??Achieverevenueof$xmillionby20??Size:Thetargetfirmshouldbeatleast$xmillioninrevenueGrowth:Thefirmwillachievethrough20??annualaverageRevenuegrowthofx%Earningspersharegrowthofy%Operatingcash-flowgrowthofz%Growth:ThetargetfirmshouldHaveannualrevenue,earnings,andoperatingcash-flowgrowthofatleastx%,y%,anz%Providenewproductsandmarketsofx%by20??PossessexcessannualproductioncapacityofxmillionunitsDiversification:Thefirmwillreduceearningsvariabilitybyx%.Diversification:Thetargetfirm’searningsshouldbelargelyuncorrelatedwiththeacquirer’searnings.Flexibility:Achieveflexibilityinmanufacturinganddesign.Flexibility:Targetshoulduseflexiblemanufacturingtechniques.Technology:Thefirmwillberecognizedbyitscustomersastheindustry’stechnologyleader.Technology:Thetargetfirmshouldpossessimportantpatents,copyrights,andotherformsofintellectualproperty.Quality:Thefirmwillberecognizedbyitscustomersastheindustry’squalityleader.Quality:Thetargetfirm’sproductdefectsmustbe

xpermillionunitsmanufactured.Service:Thefirmwillberecognizedbyitscustomersastheindustry’sserviceleader.Warrantyrecord:Thetargetfirm’scustomerclaimspermillionunitssoldshouldbenotgreaterthanx.Cost:Thefirmwillberecognizedbyitscustomersastheindustry’slow-costprovider.Laborcosts:Thetargetfirmshouldbenonunionandnotsubjecttosignificantgovernmentregulation.Innovation:Thefirmwillberecognizedbyitscustomersastheindustry’sinnovationleader.R&Dcapabilities:Thetargetfirmshouldhaveintroducedatleastx

newproductsinthelast18months.Phase2:AcquisitionPlanPlanobjectives(supporttherealizationofkeybusinessplanobjectives)TimetableDefinedbyactivitycompletiondates,deliverables(whatistobeachieved),andindividual(s)responsibleforsatisfyingobjectivesExample:DanielStuckeeistohavecompletedidentifyingalistofpotentialtargetsby2/24/20??Application:NokiaBuysSymbianNokia,aFinnishphonehandsetmanufacturer,announcedinmid-2008thatithadreachedanagreementtoacquireSymbian,itssupplierofsmartphoneoperatingsystemsoftware.Atthattime,Symbianhad60%marketshare,butitwaslosingsharerapidlytoApple.NokiaalsoannounceditsintentiontogiveawaySymbian'ssoftwareforfreeinresponsetoGoogle’sdecisioninDecember2008toofferitsAndroidoperatingsystematnocosttohandsetmakers.NokiawasseekingtoestablishanindustrystandardbasedontheSymbiansoftware,usingitasaplatformforprovidingonlineservicestosmartphoneusers,suchasmusicandphotosharing.NokiaseemstohavebeenpositioningitselfasthepremiersupplierofonlineservicestothesmartphonemarketbydominatingthethismarketwithhandsetsreliantontheSymbianoperatingsystem.Nokiahopestoexploiteconomiesofscalebyspreadinganyfixedcostassociatedwithonlineservicesoveranexpandingcustomerbase.SuchfixedexpensescouldincludearequirementbycontentserviceprovidersthatNokiapayaminimumlevelofroyaltiesinadditiontoroyaltiesthatvarywithusage.Similarly,thedevelopmentcostincurredbyserviceproviderscanbedefrayedbysellingintoagrowingcustomerbase.Nokia’sultimatesuccessseemedtodependonitsabilitytoconvinceotherhandsetmakerstoadopttheirsoftware.WhatisNokia’svisionforthefuturewithrespecttosmartphones?Whatarethefirm’sbusinessandimplementationstrategies?Wouldyoudescribethisstrategyashighorlowrisk?Explainyouranswer.Phase2:AcquisitionPlanPlanobjectives(supporttherealizationofkeybusinessplanobjectives)TimetableResource/capabilityreviewDeterminemaximumsizeofacquisitionintermsofP/E.sales,cashflow,purchaseprice,etc.Assessinternalmanagementcapabilities(Canacquirercontinuetomanagecurrentbusinessesaswellasintegratetheacquiredfirm?)Phase2:AcquisitionPlanPlanobjectives(supporttherealizationofkeybusinessplanobjectives)TimetableResource/capabilityreviewManagementpreferences(Seniormanagementguidelinestoacquisitionteam)Examples:PreferanassetorastockpurchaseUsecashonlyWillconsidercompetitorsaspotentialtargetsWantcontrollinginterestLimitEPSdilutiontotwoyearsfollowingclosingPhase2:AcquisitionPlanPlanobjectives(supporttherealizationofkeybusinessplanobjectives)TimetableResource/capabilityreviewManagementpreferencesSearchplanKeysearchcriteriaincludeindustry/geographicareaandmaximumsizeofacquisitionRelativelyfewcriteriausedtoavoidlimitinglistofpotentialtargetsPhase2:AcquisitionPlanPlanobjectives(supporttherealizationofkeybusinessplanobjectives)TimetableResource/capabilityreviewManagementpreferencesSearchplanNegotiationstrategyStartswithassessmentoftheneedsofpartiesinvolvedDetermineproposalstosatisfythehighestpriorityneedsofthepartiesinvolved.Forexample,considerUsingacquirerstockifsellerwantsataxfreesaleLong-termemploymentcontractifsellerwantstostaywiththebusinessHavingsellersignanon-competetoavoidfuturecompetitionwithsellerPhase2:AcquisitionPlanPlanobjectives(supporttherealizationofkeybusinessplanobjectives)TimetableResource/capabilityreviewManagementpreferencesSearchplanNegotiationstrategyDetermineinitialofferpriceRequiresbuyertoestimateMinimumpurchaseprice(i.e.,standaloneormarketpriceforpurchaseofsharesorliquidationvalueforassetpurchase)SynergycreatedbycombiningacquirerandtargetfirmsPercentofsynergyacquirerwillingtosharewithtarget(oftenreflectspremiumpaidonrecentsimilartransactionsortheportionofsynergycontributedbythetarget)Phase2:AcquisitionPlanPlanobjectives(supporttherealizationofkeybusinessplanobjectives)TimetableResource/capabilityreviewManagementpreferencesSearchplanNegotiationstrategyDetermineinitialofferpriceFinancingplan(“acidtest”)Howwillyoupayforacquisition?Willsomeonelendyouthemoney?WillacquirershareholderstolerateEPSdilution?Phase2:AcquisitionPlanPlanobjectives(supporttherealizationofkeybusinessplanobjectives)TimetableResource/capabilityreviewManagementpreferencesSearchplanNegotiationstrategyDetermineinitialofferpriceFinancingplanIntegrationplanObjective:CombinebusinessesasrapidlyaspracticalWhatprojectsofferthegreatestlikelihoodofrealizingsynergy?Whatmustbedonetoretainkeypeople?Whatinvestmentsmustbemadetokeepbusinessesoperational?Whatistheappropriatecommunicationplan?Howwillthecorporateculturesbebestintegrated?ApplicationsIdentifyatleast3criteriathatmightbeusedtoselectamanufacturingfirmasapotentialacquisitioncandidate?Afinancialservicesfirm?Ahightechnologyfirm?Despiteweeksofsometimesheatednegotiation,t