MBA ELECTIVE OUTLINE: MERGERS AND ACQUISITIONS

Presenters: Dave Thayser and Greg Beech

OVERVIEW
Max class size 50 students / Mergers & Acquisitions (M&A) are as core to business life as marriage is to personal life – most people’s lives will be touched by either or both experiences somewhere along the line. M&A is an essential tool of corporate strategy, and is one method by which an enterprise can meet its strategic objectives. Being familiar with best practices in M&A can contribute to the likelihood of success from deal making.
M&A is a litmus test for business confidence – M&A activity tends to follow business cycles. M&A activity declined significantly post the 2008 Global Financial Crisis, and has only recently picked up. One early sign of recovery is that M&A deals start to get bigger and more eye-catching as companies start to focus on game-changing deals again. Several such deals have appeared recently. For example, at the moment (September 2014) SABMiller is in an eat-or-be-eaten phase. It has reportedly had an offer to buy competitor Heineken rejected by the Heineken family, and as a result it has become vulnerable to a takeover bid from Anheuser-Busch.
Despite the fact that M&A is a common occurrence, success at M&A remains elusive. A regularly quoted statistic suggests that at least 50% of M&A deals either destroy shareholder value or fail to create incremental value. One reason for this is that the M&A process contains many pitfalls that can only be avoided through awareness and experience. In this elective we take you through some of the common mistakes made in M&A, and outline actions that can be taken to improve the chances of success.
The teaching style in this elective is participative and experiential. Some of the learning will take place via class discussion, and some will take place via working with relevant case studies. Where possible the presenters will make use of recent South African acquisitions that offer significant learning. At the time of writing examples of such deals include the acquisition of a significant stake in Adcock Ingram by a Bidvest-led consortium, and Woolworths’ acquisition of Australian retail chain David Jones.
The presenters are supported in this elective by some of the top M&A practitioners in South Africa. Not only are they leading experts in their fields but they also have the ability to share their experience and knowledge in an interesting and informative manner.
AIMS & OBJECTIVES / By the end of the course, students should have:
·  A sound understanding of valid strategic reasons for considering a merger or acquisition transaction
·  Insights into the factors that influence success and failure in M&A
·  An overview of the various forms that M&A can take – outright acquisition or partnering
·  An appreciation of the implications of globalisation, and in particular investment in emerging markets
·  An understanding of the M&A process, including the regulatory framework within which deals are concluded
FORMAT / .
This course will be offered over four consecutive days
The course will be case-based and interactive. Students will be expected to prepare the case studies prior to each session and will be encouraged to contribute to the discussion. Experienced guest speakers will contribute to the course.
METHOD OF ASSESSMENT / Class participation
Individual assessment
RESUME / Dave is a retired director of Ernst & Young Transaction Advisory Services (EY TAS), Ernst & Young’s corporate finance arm, but continues to consult to E&Y on acquisitions they are targeting in Africa. Dave’s Corporate Finance experience includes due diligence reviews, financial performance assessment, valuations, transaction structuring and transaction implementation.
While at EY Dave was responsible for the production of Ernst & Young’s widely-acclaimed annual research publication on Merger & Acquisition Activity in South Africa. Dave has used this knowledge base to lecture on Mergers & Acquisitions in various forums over a number of years.
Greg, a qualified CA (SA), spent eight years in the investment banking industry working in mergers & acquisitions advisory at Standard Bank and then Real Africa Durolink (‘RAD’). In 1997, he started the private equity division at RAD and led the fund-raising for a new third party fund.
Greg left formal employment in early 2000 and began consulting to clients on mergers & acquisitions and private equity. He co-founded Insight Advisors, a boutique advisory firm, in 2002. Notable transactions over the past 10 years include advising Mondi Europe on setting up their internal venture capital fund and assisting a BEE group in acquiring a stake in Stefanutti & Stocks.
Greg is an experienced lecturer and frequently presents seminars and workshops on an outsourced basis for SAICA, Atcor and Paton Training. Topics covered include valuations, mergers & acquisitions, financial analysis, due diligence, deal structuring, behavioural finance, finance for non-financial managers and financial modeling.