Roll Number: _______________ Total No.
of Pages: ___
Total No. of Questions: 09
Course: MBA, Semester: 4th
Subject Name: Merger acquisition and corporate restructuring
Subject Code: MBA914-18
RMST-2 - (Date of Exam: 30/April/2025), Session:E
Time: 1:30 hr Max Marks: 24
Instructions to Candidates:
Section A (Compulsory): All questions are mandatory. Each question carries 2
marks.
Section B (Attempt any 2 out of 3): Attempt any two questions from. Each question
carries 4 marks.
Section C (Attempt any 1 out of 2): Attempt any one question. Each question
carries 8 marks.
Students will not be permitted to leave the examination hall within the first one hour.
Section-A
1. Write briefly about Demerger.
2. Define Synergy.
3. Define Due Diligence.
4. Outline the process of value creation in merger.
Section-B
5. Compare and Contrast between horizontal and vertical merger and acquisition.
6. Analyze the impact of merger between two companies on their EPS.
7. Evaluate the regulatory compliance for acquisition of shares and takeovers of listed companies.
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8. The following data concern company’s A and B
Section-C
Particulars Company A Company B
Earnings after taxes 140000 37500
Equity shares outstanding 20000 7500
EPS(Rs) 7 5
P/E ratio 10 8
Market price(Rs.) 70 40
Company A is the acquiring company, exchanging its one share for every 1.5 shares of B
Ltd. Assume that company A exports to have the same earnings and P/E ratio after the
merger as before(no synergy effect), show the extent of gain accruing to shareholders of two
companies as a result of the merger. Are they better or worse off than they were before the
merger?
9. Read the following case study in detail and answer the questions : Mastery of mergers
and acquisitions entails using skills from a wide range of management disciplines. It could be
that many mergers and acquisitions fail because the managers leading them have an
insufficient breadth of skills and/or experience. In mastering this art one will have to call upon
many disciplines encountered in the core MBA courses. In order to evaluate the strategic
logic of a merger or acquisition, manager will need to think like a strategist. The basics of the
Strategic Planning course are extended to encompass focus and characteristics mapping.
Having evaluated the strategic logic, managers will then be challenged to put a value on the
proposed merger or acquisition transaction and, therefore, will need to think like a financier,
drawing on the knowledge acquired during the Finance course. Last, but by no means least,
managers will be challenged to implement the proposed merger or acquisition, drawing on
the knowledge acquired in the Project Management and Strategic Risk Management
courses. In Mergers and Acquisitions, managers are challenged to think in an integrated
manner; like a strategist, financier and project manager, but all at the same time. Few
functional managers, with the possible exception of a few CEOs and general managers, are
called upon to apply such a wide range of disciplines simultaneously in an integrated
manner. It is, however, our observation that many people who lead mergers and acquisitions
in practice come from a single functional background. This may be part of the explanation for
many of the failures in mergers and acquisitions, and for the recent rise of specialist merger
and acquisition project management consultancies.
Questions : a) Summarize the whole case in your own words.
b) Why mergers and acquisitions fail as per the case?
c) Discuss the reasons why project management consultancies are in demand?
d) What are the challenges for managers in the area of Mergers and Acquisitions?
Note: Disclosing your identity by writing your mobile number or marking a passing request on any
page of the answer sheet will result in an Unfair Means Case (UMC) being filed against the student."
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