JAIPURIA INSTITUTE OF MANAGEMENT, Noida PGDM (G-SM-M) SIXTH TRIMESTER (2012-2014) Course Code: FA606 Course Title: Corporate

Restructuring

3-4. Course Overview, Programme Level Learning Goals Course Overview:

The present course in Corporate Restructuring has been specially designed as elective course for the management students who are doing their specialisation in finance. Students will discover that this course is more pertaining to long term policy decisions involving formulation and implementation of strategies to sustain, compete and thrive in ever increasingly complex business environment. Every business need some form of restructuring at some point in time as a result of changed business environment, posing up eminent threats for its survival, or springing up new opportunities, which potentially can catapult the business in different league of competitors. The course has been designed to provide the conceptual framework of corporate restructuring, essentially focusing on internal and external restructuring, including takeovers, mergers and acquisitions. The course highlights the need and process of due diligence. A major part of course covers the valuation and accounting concerning restructuring of a business. The course also dwells with the post merger issues and challenges to integrate the businesses. Cross border mergers and acquisitions are covered providing insights on the opportunities and challenges linked to it.

Programme Level Learning Goals:

To appreciate the need and the strategies involved in corporate restructuring

Learning Outcomes:

To understand the conceptual and legal framework of corporate restructuring To learn the methods of business valuation from the point of corporate restructuring To evaluate the mergers and acquisitions and other forms of business restructuring

6. List of Topics/ Modules

Topic/ Module Module 1: Corporate Restructuring

Module 2: Takeovers

Module 3: Mergers and Acquisitions (M&As)

Contents/ Concepts The module deal with the conceptual framework of restructuring, its reasons, types, and barriers and associated strategies. This highlights the concept and forms of takeover, the types of takeover defence, advantages and disadvantages of takeover. Module focuses on M&A, its types. Conceptual difference between mergers and acquisitions, 1

Module 4: Due Diligence

Module 5: Valuations and Accounting Issues

Module 6: Post Merger Issues

Module 7: Cross Border Acquisitions

motives and processes involved and the ways of financing the merger deals. Explain the concept of due diligence associated with M&As, its need and process involved to catty out due diligence. Module deals with valuation and accounting issues involved with M&As, factors considered for valuation and different methods of valuation followed and challenges. This module provide the insight into the issue of integrating the companies involved in M&As and tools which are used for bringing integration. The module highlights the concept of cross border M&As and its advantages and the challenges it posses.

7. Evaluation Criteria Component Description Weight

Assignments

Group assignment will be given to different study groups, close to the end of the trimester, which will cover most of the syllabus.More in-depth insight regarding the coverage of the assignment will be given to the students after due diligence on the matter in the class. Two quizzes will be announced and conducted during the trimester in the subject of Corporate Restructuring first during pre mid-term examination period and second in post mid-term examination. The quizzes will be conducted unannounced and essentially it will be in the form of numerical problem. Quizzes will be essentially in line with continuous evaluation and students will be updated with their performance within a reasonable time. Students regularity in class, level of preparedness for each class and his/her participation in the class discussions will form the basis of evaluation for this component. The coverage will be from contents of the session plan from 1 to 12 The coverage will be from contents of the session plan from 1 to 24

10

Quizzes

20

Class performance

10

Mid-term Examination End-term Examination

20 40

8. Recommended/ Reference Text Books and Resources

Text Aurora, R. S., Shetty, K., & Kale, S. R. (2013). Mergers and Acquisitions (1st Edition,Third impression ed.) New Delhi: Oxford University Press.

References Palepu, Healy, Bernard (2010), Business Analysis & Valuation (Indian 3rd Edition), Cengage Learning,New Delhi Damodaran, Aswath (2011) , Damodaran on Valuation (2nd edition), John Wiely & Sons, New Delhi Krishnamurti,C.,S.R.,Vishwanath, Mergers,Acquisitions and Corporate Restructuring, Response Books, New Delhi

Web Resources www.moneycontrol.com Moneycontrol.com is India s leading financial information source. It s the official site for CNBC TV18, and provides news, Share Market Live, views, and analysis of financial markets. www.financialcalculators.com This website provides various financial calculators for financial planners. The site provides EMI calculators, insurance premium calculators, cash flow calculators and tax calculators. www.bseindia.com and www.nseindia.com This is the official website of Bombay Stock Exchange and National Stock Exchange of India.

9. Session Plan

Session Date

Topic

Requirements: Readings/ Cases Text Book Pg. 1-2

Learning Outcome

Module 1: Corporate Restructuring Corporate Restructuring 1 Introduction of concept

Conceptual framework

To learn broad concept and framework of corporate restructuring

Corporate Restructuring McKinsey 7S Model Reasons for Restructuring Barriers to Restructuring Types of Corporate Restructuring Corporate Restructuring Strategic Options in Corporate Restructuring Buyback of Shares in India

Text Book Pg. 3-16

To know the reasons for and barriers to restructuring To acquaint about types of restructuring

Text Book Pg. 17-43

To familiar oneself about the strategic options in corporate restructuring

LBOs & Management Buyouts

To acquaint about the conditions to be fulfilled by a company going in for a buyback.

Module 2: Takeovers 4 Takeover

Concept of Takeover Forms of Takeover Takeovers Defences Case Study based on takeover

Text Book Pg. 55-69

To know about different forms of takeover and takeover defences.

Text Book Pg. 72-79 Imperial Chemical Industries failed attempt to takeover Asian Paints Study Group Exercise To discuss failed merger deal between Cooper Tire with Apollo

To appreciate the reasons of attempted takeover.

Module 3: Mergers and Acquisitions (M&As) 6

Mergers and Acquisitions (M&As) Introduction of the concept Genesis of M&A Classification of Mergers

Text Book Pg.80-92

To develop conceptual understanding about M&A and its types.

Mergers and Acquisitions (M&As) Concept of acquisition Strategies of acquisition Types of acquisitions Tools for analysis Distinction between Mergers and Acquisitions Mergers and Acquisitions (M&As) Motives behind M&A Reasons for failure of M&As Mergers and Acquisitions (M&As) Process of M&A Financing of M&As Reverse Merger Concept of Earn-Outs

Text Book Pg.92-107

To differentiate between mergers and acquisitions

Text Book Pg.108-115

To appreciate the reasons behind merger failures

Text Book Pg.115-127

To learn about the financing of merger deals. To know about the concept of reverse merger and earn-outs To acquaint with the legal

10

Mergers and Acquisitions (M&As)

Text Book

Legal issues in M&As

Pg.171-222

issues involved with M&As in Indian context.

Module 4: Due Diligence 11 Due Diligence

Introduction of concept of due diligence Need for due diligence What does due diligence involve? Case study based on Due Diligence

Text Book Pg.133-164

To know about types and process of due diligence

12

Text Book
Pg.167-170 Advent Limited and Pourshins Limited

To understand due diligence process applied in case matter.

Module 5: Valuations and Accounting Issues 13

Valuation and Accounting Issues in M&As Introduction of concept of valuation Factors to be considered for Valuation Valuation and Accounting Issues in M&As Methods of Valuation Valuation and Accounting Issues in M&As Is DCF same in Valuation of all investments? Valuation and Accounting Issues in M&As Introduction to Accounting Issues Accounting for Amalgamations Valuation and Accounting Issues in M&As Provisions of Accounting Standard 14 International financial reporting Standards 3Business Combination Valuation and Accounting Issues in M&As

Text Book
Pg.230-232

To know the factors considered for valuation

14

Text Book Pg.231-239 Text Book Pg.242-243

To learn about methods of valuation To learn about DCF methods of valuation

15

16

Text Book Pg.243-246

To know about the accounting issues involved in M&As.

17

Text Book Pg.246-249

To acquaint about the Accounting Standard as well as IFRS concerning Mergers and Amalgamations

18

19

Text Book Pg.249-269 Text Book Pg.249-269 Text Book

Numerical problems

To develop skill to handle numerical problem based on M&As To develop skill to handle numerical problem based on M&As To develop skill to handle

Valuation and Accounting Issues in M&As

20

Numerical problems

Valuation and Accounting Issues in

M&As

21

Pg.249-269 Numerical problems Text Book

Pg.318-323 Hindalco Novelis Merger

numerical problem based on M&As To appreciate the rationale behind the merger of two major companies in metal industry.

Case Study

Module 6: Post Merger Issues 22 Post Merger Issues

Concept and Issues involved in Integration in mergers Tools for integration Strategies for Post merger success Case Study

Text Book Pg.270-275

To understand the need for integration and tools for integration.

23

Text Book Pg.324-329 TataAcquisition

To do the SWOT analysis related to the case JLR matter.

Module 7: Cross Border Acquisitions 24 Cross Border Acquisitions

Concept and need for Cross border acquisitions Benefits of Cross border Acquisitions Difficulties in Cross border Acquisitions

Text Book Pg.286-291

To appreciate the needs and challenges in cross border M&As

Pg. 293-295 Sony-Matsushita To learn about the challenges and difficulties involved in cross border acquisition as given as a case matter.

Case Study

10. Contact Details Name of the Instructor: Office Location: Telephone: Email: Teaching Venue: Office Hours: Dr. Anurag Singh Faculty lounge , First Floor , Chamber No: 6 0120-4638300-01 Ext No. 351, 09810314476 [email protected]; [email protected] Room No. Working days (8:15 am to 4:45 pm)