Skip to main content
Unit of study_

FINC3013: Mergers and Acquisitions

Semester 2, 2020 [Normal day] - Camperdown/Darlington, Sydney

Mergers and acquisitions are a fundamental component of the corporate landscape. Students enrolling in this unit will study the economic and strategic drivers of corporate restructuring activity and their use in the design and analysis of restructuring transactions; evaluate the outcomes from restructuring transactions, both the theory-based explanations and the empirical tests of the theories; learn to identify and value synergies in a restructuring transaction using �several valuation methods; develop a detailed understanding of the design and economic impacts of deal structures used to effect corporate restructuring transactions; and analyse the process of merger arbitrage and its contribution to the outcome of restructuring transactions. This unit will, where possible, integrate learning outcomes in an academic and applied context, and develop an appreciation of the regulatory environment for restructuring transactions and the impact of these regulations on the process and outcomes of restructuring transactions.

Unit details and rules

Unit code FINC3013
Academic unit Finance
Credit points 6
Prohibitions
? 
None
Prerequisites
? 
FINC2012
Corequisites
? 
None
Assumed knowledge
? 

Calculation of free cash flows, trading multiples, discounted cash flow valuation methodology, valuation sensitivities, regression analysis.

Available to study abroad and exchange students

Yes

Teaching staff

Coordinator Maurice Peat, maurice.peat@sydney.edu.au
Type Description Weight Due Length
Final exam (Open book) Type C final exam Final exam
Written exam
50% Formal exam period
Due date: 30 Nov 2020 at 15:42

Closing date: 12 Dec 2020
2 hours
Outcomes assessed: LO1 LO2 LO3 LO4 LO5 LO6 LO7
Assignment hurdle task Individual Essay
Essay
20% Week 05
Due date: 25 Sep 2020 at 17:00

Closing date: 30 Sep 2020
1000 words
Outcomes assessed: LO1 LO2 LO6 LO7
Assignment hurdle task group assignment M&A Deal Evaluation
Report and Presentation
30% Week 11
Due date: 13 Nov 2020 at 17:00

Closing date: 18 Nov 2020
1500 word Report and 10 min Presentation
Outcomes assessed: LO3 LO4 LO5 LO6 LO7
hurdle task = hurdle task ?
group assignment = group assignment ?
Type C final exam = Type C final exam ?

Assessment summary

  • Individual Essay: This assignment will give you the opportunity to engage with the academic literature and apply your critical reasoning. Your response to the question should be in the form of a 1000 word essay.

  • M&A Deal Evaluation: The group assignment gives you the opportunity to apply your critical reasoning and analytical problem-solving skills to a recent M&A transaction while building effective communication and group-work skills. Groups will ideally consist of 3-5 and need to be formed by the end of week 3. Each group will be required to prepare a 1500 word report, a PowerPoint slide deck and deliver as a group 'pitch'. Students will be taking the perspective of a consultant hired to advise on the M&A deal. The quality of your group's report and pitch presentation will receive 20% and 10% marks respectively. You should provide evidenced-reasoning to justify statements and recommendations.

  • Final exam: The final exam will test overall knowledge and understanding of the materials covered in the unit and the ability to critically apply learnt knowledge and skills to given problems. You will be assessed on your ability to clearly define and contrast concepts covered through the semester; analyse and discuss issues in the M&A environment and specific deals, apply valuation tools and evaluation methodologies to determine the outcomes of M&A scenarios; and compare and critique alternative corporate strategies and deal structures. The final exam will consist of  short-answer, and/or problem-solving questions.

Detailed information for each assessment can be found on Canvas.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a high distinction indicates work of an exceptional standard, a distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name

Mark range

Description

High distinction

85 - 100

Awarded when you demonstrate the learning outcomes for the unit at an exceptional standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Distinction

75 - 84

Awarded when you demonstrate the learning outcomes for the unit at a very high standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Credit

65 - 74

Awarded when you demonstrate the learning outcomes for the unit at a good standard, as defined by grade descriptors or exemplars outlined by your faculty or school.

Pass

50 - 64

Awarded when you demonstrate the learning outcomes for the unit at an acceptable standard, as defined by grade descriptors or exemplars outlined by your faculty or school. 

Fail

0 - 49

When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see sydney.edu.au/students/guide-to-grades.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

  • Deduction of 5% of the maximum mark for each calendar day after the due date.
  • After ten calendar days late, a mark of zero will be awarded.

Academic integrity

The Current Student website  provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.  

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

You may only use artificial intelligence and writing assistance tools in assessment tasks if you are permitted to by your unit coordinator, and if you do use them, you must also acknowledge this in your work, either in a footnote or an acknowledgement section.

Studiosity is permitted for postgraduate units unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission.

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

WK Topic Learning activity Learning outcomes
Week 01 Introduction to corporate finance and mergers and acquisitions Lecture (2 hr) LO1
Week 02 Assessing mergers and acquisitions outcomes Lecture (2 hr) LO2
Introduction to corporate finance and mergers and acquisitions Tutorial (1 hr) LO1
Week 03 Merger waves; Mergers and acquisitions in Australia Lecture (2 hr) LO2
Assessing mergers and acquisitions outcomes Tutorial (1 hr) LO2
Week 04 Why, when and how do firms engage in mergers and acquisitions? Lecture (2 hr) LO3
Merger waves; Mergers and acquisitions in Australia Tutorial (1 hr) LO2
Week 05 Synergies and Deal valuation Lecture (2 hr) LO4
Why, when and how do firms engage in mergers and acquisitions? Tutorial (1 hr) LO3
Week 06 Form of payment part 1 Lecture (2 hr) LO3
Synergies and Deal valuation Tutorial (1 hr) LO4
Week 07 Form of payment part 2 Lecture (2 hr) LO4
Form of payment part 1 Tutorial (1 hr) LO3
Week 08 Alternatives to mergers and acquisitions; Corporate restructuring Lecture (2 hr) LO1
Form of payment part 2 Tutorial (1 hr) LO4
Week 09 LBOs and go-private transactions Lecture (2 hr) LO3
Alternatives to mergers and acquisitions; Corporate restructuring Tutorial (1 hr) LO1
Week 10 Hostile takeovers and Defense tactics Lecture (2 hr) LO3
LBOs and go-private transactions Tutorial (1 hr) LO3
Week 11 Merger arbitrage Lecture (2 hr) LO5
Hostile takeovers and Defense tactics Tutorial (1 hr) LO3
Week 12 Shareholder activism and Unit review Lecture (2 hr) LO1
Merger arbitrage Tutorial (1 hr) LO5

Attendance and class requirements

Lecture recordings: All lectures will be recorded and will be available on Canvas for student use.

Please note the Business School does not own the system and cannot guarantee that the system will operate or that every class will be recorded. Students should ensure they attend and participate in all classes.

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

All readings for this unit can be accessed through the Library eReserve, available on Canvas.

Recomended text: Mergers and Acquisitions 5th Ed., Custom print, Pearson Australia (Sydney).

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

At the completion of this unit, you should be able to:

  • LO1. Analyse and discuss the strategic role of mergers and acquisitions to corporations in value creation
  • LO2. Describe how and why corporate mergers, acquisitions and restructuring activities are an important part of the efficient operations of financial markets
  • LO3. Examine particular forms of mergers and acquisitions to determine critical aspects of a deal, as well as provide a recommendation to a particular group of stakeholders
  • LO4. Measure and analyse the significance of control premium and synergies, identify and justify likely control premium and synergies in a given corporate mergers and acquisitions deal, and determine optimal deal structures. Assess the risks of mergers and acquisitions implementation
  • LO5. Explain various classes of risk management tools used in M&A and their advantages and weaknesses
  • LO6. Conduct research using archives, libraries, web-sourced data and other sources of information to produce timely and high-quality work
  • LO7. Communicate issues relating to mergers and acquisitions clearly and succinctly.

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1 Depth of disciplinary expertise

Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.

GQ2 Critical thinking and problem solving

Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.

GQ3 Oral and written communication

Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.

GQ4 Information and digital literacy

Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.

GQ5 Inventiveness

Generating novel ideas and solutions.

GQ6 Cultural competence

Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.

GQ7 Interdisciplinary effectiveness

Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.

GQ8 Integrated professional, ethical, and personal identity

An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.

GQ9 Influence

Engaging others in a process, idea or vision.

Outcome map

Learning outcomes Graduate qualities
GQ1 GQ2 GQ3 GQ4 GQ5 GQ6 GQ7 GQ8 GQ9

This section outlines changes made to this unit following staff and student reviews.

Changes to facilitate online learning.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.