Dr. P.V. Viswanath



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FIN 648: Mergers and Acquisitions
Assignments, Spring 2006


Assignments must be typed and submitted before the start of class on the due date (see Calendar for dates).

Assignment 1 (Group)

Choose one of the following proposed mergers:

  • Boston Scientific Corporation (NYSE: BSX) with Guidant Corporation (NYSE: GDT)
  • Johnson & Johnson (NYSE: JNJ) with Guidant Corporation (NYSE: GDT)

Analyze the proposed merger strategically. Use one or more of the following:

  • Perform a SWOT analysis.
  • Analyze the firms' competitive positions using Shapiro's sources of economic value.
  • Growth-Share Matrix Analysis
  • Porter Model
  • Use the Kauppi model (see "Strategic Acquisitions" under Websites listed on Classnotes page)

Assignment 2 (Group)

Do the following for your merger:

  • Value the merger target, using the framework discussed in class, using data available from the firm's 10-Ks, as well as any other public sources, as of March 31, 2006. (Hint: Value it as of Dec. 31, 2005 and then compound forward to get a March 31 figure.)
  • (Don't do this, as of yet.) Use the spreadsheet, "Value Merge" from Chapter 9 of Bruner (you can find the template Under Course Documents on the class Blackboard site), to value the merger.

Assignment 3(Group)

For your merger (BSX and GDT or JNJ and GDT):

  • How would you design your offer? (Ignore the fact that BSX has already won; go back to the time that JNJ and BSX were still fighting over GDT.)
  • Use Chapters 18, 19, 20, 21 and 23 from Bruner. (Note that there are no specific slides relating to Chap. 20 -- nevertheless, we did address most of the issues from that chapter. Read up, on your own, any parts that we did not cover in class.
  • Address as many issues from Chapter 18, as are relevant. In addition, answer these questions specifically
    • What should be the form of the acquisitive reorganization?
      • Should the deal be a cash deal or a stock deal or a combination
      • Should it be a merger or a consolidation or a buyout?
  • What is the range of deals that will still leave the deal attractive to both parties. Do an analysis patterned after Chapter 21.
  • Would you include any contingent payments? Explain. Include the value of these contingent payments into your final bid price.

Assignment 4 (Group)

For your merger (BSX and GDT or JNJ and GDT):

  • Evaluate synergies, using the "Valuing Synergies" spreadsheet (you can find the template Under Course Documents on the class Blackboard site).


Assignments by Topic

  • Introduction
    • Go to the Wall Street Journal; find an example of a combination.
      • Is it a merger or an acquisition?
      • Is it a friendly deal or a hostile one?
      • Is it a horizontal merger, a vertical merger or a conglomerate merger?


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