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Mergers, Acquisitions, and Corporate Restructurings, 7th Edition

Book Description

The essential M&A primer, updated with the latest research and statistics

Mergers, Acquisitions, and Corporate Restructurings provides a comprehensive look at the field's growth and development, and places M&As in realistic context amidst changing trends, legislation, and global perspectives. All-inclusive coverage merges expert discussion with extensive graphs, research, and case studies to show how M&As can be used successfully, how each form works, and how they are governed by the laws of major countries. Strategies and motives are carefully analyzed alongside legalities each step of the way, and specific techniques are dissected to provide deep insight into real-world operations. This new seventh edition has been revised to improve clarity and approachability, and features the latest research and data to provide the most accurate assessment of the current M&A landscape. Ancillary materials include PowerPoint slides, a sample syllabus, and a test bank to facilitate training and streamline comprehension.

As the global economy slows, merger and acquisition activity is expected to increase. This book provides an M&A primer for business executives and financial managers seeking a deeper understanding of how corporate restructuring can work for their companies.

  • Understand the many forms of M&As, and the laws that govern them
  • Learn the offensive and defensive techniques used during hostile acquisitions
  • Delve into the strategies and motives that inspire M&As
  • Access the latest data, research, and case studies on private equity, ethics, corporate governance, and more

From large megadeals to various forms of downsizing, a full range of restructuring practices are currently being used to revitalize and supercharge companies around the world. Mergers, Acquisitions, and Corporate Restructurings is an essential resource for executives needing to quickly get up to date to plan their own company's next moves.

Table of Contents

  1. Cover
  2. Title Page
  3. Preface
  4. PART ONE: Background
    1. CHAPTER ONE: Introduction
      1. RECENT M&A TRENDS
      2. TERMINOLOGY
      3. VALUING A TRANSACTION
      4. TYPES OF MERGERS
      5. MERGER CONSIDERATION
      6. MERGER PROFESSIONALS
      7. MERGER ARBITRAGE
      8. LEVERAGED BUYOUTS AND THE PRIVATE EQUITY MARKET
      9. CORPORATE RESTRUCTURING
      10. MERGER NEGOTIATIONS
      11. DEAL STRUCTURE: ASSET VERSUS ENTITY DEALS
      12. MERGER AGREEMENT
      13. MERGER APPROVAL PROCEDURES
      14. DEAL CLOSING
      15. SHORT-FORM MERGER
      16. FREEZEOUTS AND THE TREATMENT OF MINORITY SHAREHOLDERS
      17. APPRAISAL ARBITRAGE
      18. REVERSE MERGERS
      19. NOTES
    2. CHAPTER TWO: History of Mergers
      1. MERGER WAVES
      2. FIRST WAVE, 1897–1904
      3. SECOND WAVE, 1916–1929
      4. THE 1940s
      5. THIRD WAVE, 1965–1969
      6. TRENDSETTING MERGERS OF THE 1970S
      7. FOURTH WAVE, 1984–1989
      8. FIFTH WAVE, 1992–2001
      9. SIXTH WAVE, 2004–2007
      10. NOTES
    3. CHAPTER THREE: Legal Framework
      1. LAWS GOVERNING MERGERS, ACQUISITIONS, AND TENDER OFFERS
      2. OTHER U.S. TAKEOVER RULES
      3. TAKEOVERS AND INTERNATIONAL SECURITIES LAWS
      4. U.S. STATE CORPORATION LAWS AND LEGAL PRINCIPLES
      5. STATE ANTITAKEOVER LAWS
      6. REGULATION OF INSIDER TRADING
      7. ANTITRUST LAWS
      8. MEASURING CONCENTRATION AND DEFINING MARKET SHARE
      9. EXAMPLE OF THE HH INDEX
      10. EUROPEAN COMPETITION POLICY
      11. NOTES
    4. Research Note: Event Studies Methodology
      1. M&A Research: Event Studies
      2. NOTES
    5. CHAPTER FOUR: Merger Strategy
      1. GROWTH
      2. SYNERGY
      3. OPERATING SYNERGY
      4. DIVERSIFICATION
      5. FOCUS HYPOTHESIS
      6. POSSIBLE EXPLANATION FOR THE DIVERSIFICATION DISCOUNT
      7. DO DIVERSIFIED OR FOCUSED FIRMS DO BETTER ACQUISITIONS?
      8. OTHER ECONOMIC MOTIVES
      9. HUBRIS HYPOTHESIS OF TAKEOVERS
      10. DO MANAGERIAL AGENDAS DRIVE M&A?
      11. OTHER MOTIVES
      12. NOTES
  5. PART TWO: Hostile Takeovers
    1. CHAPTER FIVE: Antitakeover Measures
      1. MANAGEMENT ENTRENCHMENT HYPOTHESIS VERSUS STOCKHOLDER INTERESTS HYPOTHESIS
      2. RIGHTS OF TARGETS' BOARDS TO RESIST: UNITED STATES COMPARED TO THE REST OF THE WORLD
      3. PREVENTATIVE ANTITAKEOVER MEASURES
      4. POISON PILLS
      5. CORPORATE CHARTER AMENDMENTS
      6. CHANGING THE STATE OF INCORPORATION
      7. ACTIVE ANTITAKEOVER DEFENSES
      8. INFORMATION CONTENT OF TAKEOVER RESISTANCE
      9. NOTES
    2. CHAPTER SIX: Takeover Tactics
      1. PRELIMINARY TAKEOVER STEPS
      2. TENDER OFFERS
      3. ADVANTAGES OF TENDER OFFERS OVER OPEN MARKET PURCHASES
      4. PROXY FIGHTS
      5. NOTES
    3. CHAPTER SEVEN: Hedge Funds as Activist Investors
      1. MACROECONOMIC FOUNDATIONS OF THE GROWTH OF ACTIVIST FUNDS
      2. LEADING ACTIVIST HEDGE FUNDS AND INSTITUTIONAL INVESTORS
      3. HEDGE FUNDS AS ACQUIRERS
      4. HEDGE FUND ACTIVISM AND FIRM PERFORMANCE
      5. BUYOUT PREMIUMS: ACTIVIST HEDGE FUNDS VERSUS PRIVATE EQUITY FIRMS
      6. NOTES
  6. PART THREE: Going-Private Transactions and Leveraged Buyouts
    1. CHAPTER EIGHT: Leveraged Buyouts
      1. TERMINOLOGY
      2. HISTORICAL TRENDS IN LBOS
      3. MANAGEMENT BUYOUTS
      4. CONFLICTS OF INTEREST IN MANAGEMENT BUYOUTS
      5. U.S. COURTS' POSITION ON LEVERAGED BUYOUT CONFLICTS
      6. FINANCING FOR LEVERAGED BUYOUTS
      7. RETURNS TO STOCKHOLDERS FROM LBOS
      8. RETURNS TO STOCKHOLDERS FROM DIVISIONAL BUYOUTS
      9. EMPIRICAL RESEARCH ON WEALTH TRANSFER EFFECTS
      10. PROTECTION FOR CREDITORS
      11. INTRA-INDUSTRY EFFECTS OF BUYOUTS
      12. NOTES
    2. CHAPTER NINE: The Private Equity Market
      1. HISTORY OF THE PRIVATE EQUITY AND LBO BUSINESS
      2. PRIVATE EQUITY MARKET
      3. COMPUTING PRIVATE EQUITY INTERNAL RATES OF RETURN
      4. CHARACTERISTICS OF PRIVATE EQUITY RETURNS
      5. REPLICATING PRIVATE EQUITY INVESTING
      6. BOARD INTERLOCKS AND LIKELIHOOD OF TARGETS TO RECEIVE PRIVATE EQUITY BIDS
      7. SECONDARY MARKET FOR PRIVATE EQUITY INVESTMENTS
      8. NOTES
    3. CHAPTER TEN: High-Yield Financing and the Leveraged Loan Market
      1. HISTORY OF THE JUNK BOND MARKET
      2. LEVERAGED LOAN MARKET
      3. STAPLED FINANCING
      4. NOTES
  7. PART FOUR: Corporate Restructuring
    1. CHAPTER ELEVEN: Corporate Restructuring
      1. DIVESTITURES
      2. DIVESTITURE AND SPINOFF PROCESS
      3. MANAGERIAL OWNERSHIP AND SELL-OFF GAINS
      4. ACTIVISTS AND SELL-OFFS
      5. SHAREHOLDER WEALTH EFFECTS OF SPINOFFS: U.S. VERSUS EUROPE
      6. EQUITY CARVE-OUTS
      7. VOLUNTARY LIQUIDATIONS OR BUST-UPS
      8. TRACKING STOCKS
      9. MASTER LIMITED PARTNERSHIPS AND SELL-OFFS
      10. NOTES
    2. CHAPTER TWELVE: Restructuring in Bankruptcy
      1. TYPES OF BUSINESS FAILURE
      2. CAUSES OF BUSINESS FAILURE
      3. BANKRUPTCY TRENDS
      4. U.S. BANKRUPTCY LAWS
      5. REORGANIZATION VERSUS LIQUIDATION
      6. REORGANIZATION PROCESS
      7. BENEFITS OF THE CHAPTER 11 PROCESS FOR THE DEBTOR
      8. PREPACKAGED BANKRUPTCY
      9. WORKOUTS
      10. CORPORATE CONTROL AND DEFAULT
      11. LIQUIDATION
      12. INVESTING IN THE SECURITIES OF DISTRESSED COMPANIES
      13. NOTES
    3. CHAPTER THIRTEEN: Corporate Governance
      1. STRUCTURE OF CORPORATIONS AND THEIR GOVERNANCE
      2. CEO SEVERANCE PAYMENTS
      3. MANAGERIAL COMPENSATION, MERGERS, AND TAKEOVERS
      4. CEO COMPENSATION AND POWER
      5. GOLDEN PARACHUTES
      6. COMPENSATION CHARACTERISTICS OF BOARDS THAT ARE MORE LIKELY TO KEEP AGENCY COSTS IN CHECK
      7. ROLE OF THE BOARD OF DIRECTORS
      8. ANTITAKEOVER MEASURES AND BOARD CHARACTERISTICS
      9. DISCIPLINARY TAKEOVERS, COMPANY PERFORMANCE, CEO, AND BOARDS
      10. MERGER STRATEGY AND CORPORATE GOVERNANCE
      11. CEO COMPENSATION AND M&A PROGRAMS
      12. DO BOARDS REWARD CEOS FOR INITIATING ACQUISITIONS AND MERGERS?
      13. CEO COMPENSATION AND DIVERSIFICATION STRATEGIES
      14. AGENCY COSTS AND DIVERSIFICATION STRATEGIES
      15. INTERESTS OF DIRECTORS AND M&AS
      16. MANAGERIAL COMPENSATION AND FIRM SIZE
      17. CORPORATE CONTROL DECISIONS AND THEIR SHAREHOLDER WEALTH EFFECTS
      18. DOES BETTER CORPORATE GOVERNANCE INCREASE FIRM VALUE?
      19. CORPORATE GOVERNANCE AND COMPETITION
      20. EXECUTIVE COMPENSATION AND POSTACQUISITION PERFORMANCE
      21. MERGERS OF EQUALS AND CORPORATE GOVERNANCE
      22. NOTES
    4. CHAPTER FOURTEEN: Joint Ventures and Strategic Alliances
      1. CONTRACTUAL AGREEMENTS
      2. COMPARING STRATEGIC ALLIANCES AND JOINT VENTURES WITH MERGERS AND ACQUISITIONS
      3. JOINT VENTURES
      4. STRATEGIC ALLIANCES
      5. NOTES
    5. CHAPTER FIFTEEN: Valuation
      1. VALUATION METHODS: SCIENCE OR ART?
      2. MANAGING VALUE AS AN ANTITAKEOVER DEFENSE
      3. BENCHMARKS OF VALUE
      4. HOW THE MARKET DETERMINES DISCOUNT RATES
      5. VALUATION OF THE TARGET'S EQUITY
      6. MARKETABILITY OF THE STOCK
      7. TAKEOVERS AND CONTROL PREMIUMS
      8. VALUATION OF STOCK-FOR-STOCK EXCHANGES
      9. SHAREHOLDER WEALTH EFFECTS AND METHODS OF PAYMENT
      10. EXCHANGE RATIO
      11. FIXED NUMBER OF SHARES VERSUS FIXED VALUE
      12. MERGER NEGOTIATIONS AND STOCK OFFERS: HALLIBURTON VERSUS BAKER HUGHES
      13. INTERNATIONAL TAKEOVERS AND STOCK-FOR-STOCK TRANSACTIONS
      14. DESIRABLE FINANCIAL CHARACTERISTICS OF TARGETS
      15. NOTES
    6. CHAPTER SIXTEEN: Tax Issues in M&A
      1. FINANCIAL ACCOUNTING FOR M&A
      2. TAXABLE VERSUS TAX-FREE TRANSACTIONS
      3. TAX CONSEQUENCES OF A STOCK-FOR-STOCK EXCHANGE
      4. ASSET BASIS STEP-UP
      5. CHANGES IN THE TAX LAWS
      6. ROLE OF TAXES IN THE MERGER DECISION
      7. ROLE OF TAXES IN THE CHOICE OF SELL-OFF METHOD
      8. ORGANIZATIONAL FORM AND M&A PREMIUMS
      9. CAPITAL STRUCTURE AND PROPENSITY TO ENGAGE IN ACQUISITIONS
      10. TAXES AS A SOURCE OF VALUE IN MANAGEMENT BUYOUTS
      11. MISCELLANEOUS TAX ISSUES
      12. NOTES
  8. Glossary
  9. Index
  10. End User License Agreement