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25807 Mergers and Acquisitions

UTS: Business: Finance and Economics
Credit points: 3 cp

Subject level: Postgraduate

Result Type: Grade and marks

Requisite(s): 25741 Capital Markets AND 25765 Corporate Finance
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject examines all aspects of the process by which one organisation is subsumed into another. Topics covered include valuation, leveraged buyouts, asset sales and restructuring and defeasance. Legal and tax aspects of mergers and acquisitions are also examined.

Subject objectives/outcomes

On successful completion of this subject students will be able to:

  1. analyse company mergers
  2. evaluate the costs, benefits of mergers and acquisitions
  3. apply financial techniques involved in mergers and acquisitions.

Contribution to graduate profile

Mergers and Acquisitions are important processes of economic rationalisation. This course addresses all of the important issues arising from this process.

Teaching and learning strategies

The subject will be taught using a combination of lectures and workshops. These classes will be supplemented with both printed and electronic learning materials and resources. The UTS web-based communication tool (UTS Online) will be used to share information and encourage interaction between staff and students. Students will also use appropriate computer software such as spreadsheets and word processors to complete assigned tasks.

Content

  • Economics of mergers and acquisitions
  • Choosing and valuing a target
  • Financial takeovers-leveraged buyouts
  • Asset sales and restructuring
  • Defeasance
  • Management buyouts
  • Legal and taxation aspect.

Assessment

Assessment item 1: Assignment (Individual)

Objective(s): 1-3
Weighting: 40%
Task: The assignment is designed to assess students' understanding of the theories and concepts to demonstrate that students have met objectives 1-3.

Assessment item 2: Final Exam (Individual)

Objective(s): 1-3
Weighting: 60%
Task: This exam, which may consist of multiple choice and short answer questions, will test students' understanding of the theory and their ability to apply the theory to mergers and acquisition decisions. This will enable students to demonstrate that they have met objectives 1-3.

Indicative references

Course notes: Students will be supplied with all necessary readings and notes during the course. The additional readings suggested below are for students who wish to achieve a more detailed understanding of the concepts covered in this course.

Lonergan W Valuation of Business, Shares and Other Equity, 4th edition, Allen & Unwin, Feb 2003

Bennett Stewart III, G The Quest for Value. New York, HarperCollins Publishers, 1991, 1999

Copeland, T., Koller, T., and Murrin, J. Valuation: Measuring and Managing the Value of Companies. John Wiley & Sons Inc; 3rd edition (July 2000)

Bishop, S.R., Crapp, H.R., Faff, R.W., and Twite, G.J. Corporate Finance. 4th edition, Holt, Rinehart and Winston 2000

Faculty of Business (1999), Guide to Writing Assignments, (available from the Co-op Bookshop)