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LUU NGOC HAN THAO MY THU THANH THU TRANG HUYEN TRAM
NEGOTIATING DIFFERENT TYPES OF PROJECTS
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NEGOTIATING
DIFFERENT TYPES
OF PROJECTS
MERGER AND
ACQUISITION - M&A
TABLE OF
CONTENTS
Definition and Classification
Merger and Acquisition Negotiation
Necessary factors in M&A
Negotiation
WARM UP
GAME
There are the companies which have merged and
bought back recently. Linking 2 company logos
which were acquired or merged that you know.
On October 9, Thaco Group of billionaire
Tran Ba Duong said that Emart Group
(Korea) and Thaco had completed the
transfer of Emart supermarket business in
Vietnam. According to Korea's Korean
Times, the fact that Emart Group sold its
entire retail business in Vietnam to Thaco
was because the company failed to expand
its business into the Southeast Asian
market despite great efforts.
M&A agreement between ThaiBev, one of the
leading beverage companies in Southeast Asia. It
is the largest beverage enterprise in Thailand.
With Saigon Beer - Alcohol - Beverage
Corporation (SABECO). The largest M&A deal in
Asia's brewing industry worth $4.8 billion in
ThaiBev's acquisition of a 53.59% stake in Sabeco.
This is a move to dominate the Vietnamese
market by the Thai "beverage giant", when Sabeco
is one of the most famous beer brands in our
country with 41% market share.
According to the new agreement reached with
General Motors (GM), VinFast will take over the
current system of authorized dealers of the
Chevrolet brand and become the exclusive
distributor of Chevrolet branded products and
services in the Vietnam market.
Types and
What's Merger Motives of Merger
and Acquisition and Acquisition
Mean ?
DEFINITION
&
CLASSIFICATION
1 What are the
differences between
Merge and
Acquisition ?
WHAT'S MERGER &
ACQUISITION MEAN?
Merger and acquisition (M&A) is the
process through which companies
consolidate via acquiring or merging
with other companies, including the
acquisition of a company’s assets as well
as its equity.
What are the differences between Merge and Acquisition?
Comparative criteria Acquisition Merger
A merger is an association between businesses of
Acquisition is a form in which a large business buys
Definition out smaller or weaker businesses
the same size and the creation of a new business,
new legal status
By determining the value of the merged company
No price specified the value of the acquired company
Valuation into shares that determine its value in cash
by how many shares of the merged company
The board of directors of the following merged
The board of directors of the acquired company has no
company when merging, the position is not equal
say and no power in the reorganization of the new
Operation company acquired
to the merged company.
After the merger, the merged company often loses
Legal consequences The purchased enterprise retains its old legal status Merged enterprises to form new legal entities
TYPES OF M&AN
MEAN?
BUSINESS SECTORS PRIVATIZATION FRIENDLY OR JOINT VENTURE LEVERAGED
HOSTILE BUYOUT
Horizontal Private
Merger Public
Vertical Merger
Concentric
Merger
MOTIVES FOR MERGER AND ACQUISITION
Higher growth
Synergies
Horizontal integration
Vertical integration
Diversification
Tax benefits
2
MERGER AND ACQUISITION
NEGOTIATION
KEY PARTICIPANTS IN NEGOTIATING MERGER
AND ACQUISITION
SENIOR/ OPERATING INVESTMENT BANKS
MANAGEMENT
Providing strategic and tactical advice
Responsible for communicating its and acquisition opportunities; screening
preferences about how the acquisition potential buyers and sellers, making
process should be managed, a timetable initial contact with a seller or buyer; and
for completing the acquisition, who will providing negotiation support, valuation,
be the “deal owner”. and deal-structuring guidance.
LAWYERS ACCOUNTANTS
Structuring the deal, evaluating risk, Advising on the most appropriate tax
negotiating many of the tax and and financial structures and on
financial terms and conditions, performing financial due diligence. They
arranging financing, and coordinating also prepare financial statements and
the timing and sequence of events to perform audits.
complete the transaction.
DEALING A
M&A
NEGOTIATION
IN REALITY
A product from group 4
LET'S START !!!
3
NECESSARY FACTORS IN M&A
NEGOTIATION
Building a Determining Searching for Evaluating
Communicating M&A Negotiated unnegotiated
working Underlying
Effectively across Options to alternatives to
relationship with Interests of Each
cultures Increase tender offers
a M&A prospect M&A Partner
Synergies
Strive to empathize with potential offerees,
actively listen to their concerns and
COMMUNICATING constraints, ask open-ended questions
EFFECTIVELY
ACROSS Actively speak to the other side , in such a
CULTURES way that they develop a persuasive
argument to assert their own concerns and
constraints, and make sure they are
understood by the other side and are
perceived as convincing.
NOTES !
IN A WORD, MANAGERS, PREPARING FOR
COMMUNICATION OUTSIDE THEIR OWN CULTURE, NEED
THE GAP BETWEEN THE OTHER AND THEMSELVES
Reduce the difference between others and them (1)
Questioning the answers that they hold about others and themselves (2)
BUILDING A WORKING RELATIONSHIP WITH A
M&A PROSPECT
IN SOME SECTORS, LIKE MASS MARKETING, TAKING OVER A STOCK ALSO MEANS BEING LIABLE FOR
DEFECTIVE PRODUCTS FOR A PERIOD OF TEN YEAR. IT IS BETTER FOR ACQUIRERS TO KNOW WHAT THEY
CAN BECOME RESPONSIBLE FOR.
Accounting and Financial
Audit
Commercial Audit
Legal Audit
Social Audit
DETERMINING UNDERLYING
INTERESTS OF EACH M&A
PARTNER
Expansion
Reinforcing one’s position on a market
Gaining access to new markets
Benefiting from complementary skills, restructuring,
diversifying activities and risks
Integrating up- or down-stream, controlling the
costs of production or the prices of distribution, etc
DETERMINING UNDERLYING
INTERESTS OF EACH M&A
PARTNER
The interests that need to be clarified are in particular
Strategic Objectives Financial Objectives
NOTES !
DURING THE NEGOTIATION PROCESS, MAKE SURE
THAT THE DEMANDS YOU MAKE BASED ON THE
CLARIFIED INTERESTS ARE REASONABLE. IF YOU
ASK TOO HIGH OR TOO UNREASONABLE, YOU WILL
BE JUDGED AS INSINCERE, CAUSING SUSPICION OF
YOUR PARTNER.
SEARCHING FOR M&A NEGOTIATED OPTIONS
TO INCREASE SYNERGIES
PRACTICE THE PRINCIPLE OF RECIPROCITY
Proposing to learn from their counterparts,
before even asking them to learn from them
FIX CLEAR STRATEGIC OBJECTIVES AND FINANCIAL RESULTS
Managers, when possible, should also fix clear strategic objectives and
financial results. They should also talk about changes to cope with
weaknesses
INVOLVING EARLY ON IN THE PROCESS OF M&A
The representatives of the acquirer will be better off involving early on in
the process of M&A the managers of the prospect
EVALUATING UNNEGOTIATED ALTERNATIVES TO TENDER OFFERS
(THE SPECIAL CASE OF HOSTILE TAKEOVER)
the acquisition of one company by another corporation against
"Hostile takeover"
the wishes of the former.
In a hostile takeover:
The company being
The target company
acquired
The one executing the
The acquirer
takeover
EVALUATING UNNEGOTIATED ALTERNATIVES TO TENDER OFFERS
(THE SPECIAL CASE OF HOSTILE TAKEOVER)
In a hostile takeover:
The acquirer goes directly to the company's shareholders or fights to
replace management to get the acquisition approved. Approval of a
hostile takeover is generally completed through either a tender offer or a
proxy fight.
The acquirer
EVALUATING UNNEGOTIATED ALTERNATIVES TO TENDER OFFERS
(THE SPECIAL CASE OF HOSTILE TAKEOVER)
A broader control in the target company
Advantage of a Allows them to define the terms of the new
Hostile takeover company and of its management as they please
Not have to negotiate the bid with the target
company The acquirer
EVALUATING UNNEGOTIATED ALTERNATIVES TO TENDER OFFERS
(THE SPECIAL CASE OF HOSTILE TAKEOVER)
Feel free to negotiate or not within the acquired
company at a later stage, during implementation
Advantage of a
Hostile takeover
Bidders can catch not only the target by surprise, but
also the market and the competitors
The acquirer
EVALUATING UNNEGOTIATED ALTERNATIVES TO TENDER OFFERS
(THE SPECIAL CASE OF HOSTILE TAKEOVER)
A financial risk in the evaluation of the target
Disadvantage of a An increased risk of failure of the operation
Hostile takeover because of the defenses that are raised by the
target
A risk of arousing anThe
hostile atmosphere in the
acquirer
new corporation if the bid initiator succeeds
TIP KS
S AND TRIC
Noegotiate in
Select your
parallel, not in
negotiation team
series
Be decisive and Know when to
Determine what close the deal
put an offer on
you want and have plan B
the table
Group 4
CONCLUSION
Communication effectiveness must
A working relationship between
be developed across cultures both in
M&A partners help disclose
terms of awareness of self and
information for an extensive audit
empathy towards the other
A good understanding of both sides’ interests help overcome some
constraints and generate creative options that will not simply contribute
to deal-making, but also to prepare the implementation stage
h a n k s
Tfor listening
ou r
nta tion!
prese
