COMM 471 - Mergers and Acquisitions

Financial management is the art and science of basing important corporate decisions and their implementation on current financial theory, advanced quantitative and empirical methods, and best practices deduced from careful study of relevant business cases. In this course we will use mergers, acquisitions, and corporate restructurings as a focal point in our study of financial management. These critical events in the life of a corporation require sound judgment based on the full set of tools available to the financial manager. We will draw on, apply to M&A settings, and extend your knowledge of finance topics including valuation, financial statement analysis, working capital management, capital structure, financial distress, securities markets, securities issuance, agency theory, corporate governance, executive compensation, and both real and financial options. Our study of change of control will include the economic motivations for M&A activity, advanced valuation, transaction structuring, creative financing, risk management, tactics for friendly M&A negotiations and hostile transactions, due diligence, and execution. We consider the central role of corporate managers, private investors, investment funds, public financial markets, and regulators.

Learning objectives

Upon successful completion of this course, students will:

  • be able to identify plausible motivations for M&A activity.
  • understand the reasons for differences in the method of payment and financing for different transactions, and be able to recommend reasonable payment and financing packages for a proposed deal.
  • further develop their knowledge of valuation techniques that can be applied in M&A settings and know when and where to apply these methods.
  • understand incentives of different parties and how these will influence their actions.
  • know the factors that are associated with long-run success or failure in change of control transactions from a shareholder point of view, and be able to use this knowledge to predict what transactions might be beneficial to investors.
  • understand tactics for friendly negotiations and hostile transactions.
  • understand the legal and regulatory hurdles involved in change of control transactions.
  • be able to assess how securities market conditions affect M&A activity.
  • have completed a pitch proposal for a transaction, and be able to fully explain the deal including motivation, valuation, transaction structuring, and integration.

Note: COMM 471 was formerly titled Financial Management.

Prerequisite: COMM 370.

Course credits:

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