Chapter-18收購、兼并和重組課后題目

Cross-BorderMergersandAcquisitions:Analysis,StructuringandValuationCourageisnottheabsenceoffear.Itisdoingthethingyoufearthemost.—RickWarrenExhibit1:CourseLayout:Mergers,Acquisitions,andOtherRestructuringActivitiesPartIV:DealStructuringandFinancingPartII:M&AProcessPartI:M&AEnvironmentCh.11:PaymentandLegalConsiderationsCh.7:DiscountedCashFlowValuationCh.9:FinancialModelingTechniquesCh.6:M&APostclosingIntegrationCh.4:BusinessandAcquisitionPlansCh.5:SearchthroughClosingActivitiesPartV:AlternativeBusinessandRestructuringStrategiesCh.12:Accounting&TaxConsiderationsCh.15:BusinessAlliancesCh.16:Divestitures,Spin-Offs,Split-Offs,andEquityCarve-OutsCh.17:BankruptcyandLiquidationCh.2:RegulatoryConsiderationsCh.1:MotivationsforM&APartIII:M&AValuationandModelingCh.3:TakeoverTactics,Defenses,andCorporateGovernanceCh.13:FinancingtheDealCh.8:RelativeValuationMethodologiesCh.18:Cross-BorderTransactionsCh.14:ValuingHighlyLeveragedTransactionsCh.10:PrivateCompanyValuationLearningObjectivesPrimaryLearningObjective:Toprovideanoverviewofhowtoanalyze,structure,andvaluecross-borderM&As --IllustrateusingJuly1,2011Nestletakeoverof

China’sHsuFuChiSecondaryLearningObjectives:ToprovideanunderstandingofMotivesforinternationalexpansionCommoninternationalmarketentrystrategiesAstructuredcross-borderM&AprocessPlanningandimplementingcross-bordertransactionsindevelopedcountriesPlanningandimplementingcross-bordertransactionsinemergingcountries.Characteristicsanddeterminantsofcross-borderM&AsValuingcross-bordertransactionsEmpiricalstudiesoffinancialreturnstointernationaldiversificationGloballyIntegratedVersus

SegmentedCapitalMarketsGloballyintegratedcapitalmarketsprovideforeignerswithunfetteredaccesstolocalcapitalmarketsandlocalresidentstoforeigncapitalmarkets.SegmentedcapitalmarketsExhibitdifferentbondandequitypricesindifferentgeographicareasforidenticalassetsintermsofriskandmaturity.ArisewheninvestorsareunabletomovecapitalfromonemarkettoanotherduetocapitalcontrolsorapreferenceforlocalmarketinvestmentsDevelopedVersusEmergingCountriesDevelopedcountries:CharacterizedbySignificant/sustainablepercapitaGDPgrowth;Globallyintegratedcapitalmarkets;Well-definedlegalsystem;Transparentfinancialstatements;Currencyconvertibility;andStablegovernment.Emergingcountries:CharacterizedbyAlackofmanyofthecharacteristicsofdevelopedcountriesMotivesfor

InternationalExpansionGeographicandindustrialdiversificationAcceleratinggrowthIndustryconsolidationUtilizationoflowerrawmaterialandlaborcostsLeveragingintangibleassetsMinimizingtaxliabilitiesAvoidingentrybarriersAvoidingfluctuatingexchangeratesFollowingcustomersCommonMarketEntryStrategiesMergers&acquisitions(Offerquickaccessbutoftenexpensive,complex,andbesetbyculturalissues)Greenfieldorsoloventures(Mayofferaboveaveragereturnsbuttotalinvestmentisatrisk)Alliancesandjointventures(Allowsrisk/costsharing&accesstoother’sresources;mayfacilitateentry;butmustshareprofitsandcreatespotentialcompetitors)Exporting(Cheaperthanestablishinglocaloperationsbutstillrequireslocalmarketing/distributionchannels)Licensing(Leastprofitableandriskyentrystrategyandlackofcontrolcouldjeopardizebrandortrademark)DiscussionQuestionsWhatarethedifferencesbetweensegmentedandgloballyintegratedcapitalmarkets?Howdothesedistinctionsaffectpricesoffinancialassetsofcomparableriskandmaturityinvariouscountries?Ofthevariousmotivesforinternationalexpansion,whichdoyoubelieveisthemostcommonandwhy?Doyoubelievethatsomemarketentrystrategiesaremoresuitableforemergingthanfordevelopedcountries?Explainyouranswer.CharacteristicsandDeterminantsofCross-BorderMergersandAcquisitionsOnaverage,aboutone-thirdofglobalM&Aactivityinvolvecross-bordertransactions.Mostcross-borderM&AsinvolveprivatefirmsoutsideoftheU.S.Geography(proximity),accountingdisclosure,andbilateraltradeincreasethelikelihoodofmergersbetweentwocountries.Firmsincountrieswithrisingstockmarkets,appreciatingcurrencies,andwhosesharesmaybeovervaluedtendtobeacquirers.Firmsincountrieswithdecliningstockmarkets,depreciatingcurrenciesandwhosesharesmaybeundervaluedtendtobetargets.Source:IsilErel,RoseC.Liao,andMichaelS.Weisbach,DeterminantsofCross-BorderMergersandAcquisitions,forthcomingJournalofFinance,2012.Resultsreflect59,172M&Atransactionsbetween1990and2007.TheAcquisitionProcessPre-PurchaseDecisionActivitiesPost-PurchaseDecisionActivitiesPhase1:BusinessPlanPhase2:AcquisitionPlanPhase3:SearchPhase4:ScreenPhase5:FirstContactPhase6:NegotiationPhase7:IntegrationPlanPhase8:ClosingPhase9:IntegrationPhase10:EvaluationImplementingCross-BorderTransactionsinDevelopedCountriesForeignacquirersofU.S.businessesAcquisitionvehicle:OftenuseC-corporations,limitedliabilitycompanies,orpartnershipsFormofpayment:MostoftencashFormofacquisition:ShareacquisitionsgenerallythesimplestPost-mergerorganization:Centralizedorganization(divisionstructure)usedtorapidlyrealizesynergiesbutdecentralizedoperations(holdingcompany)usedwhereculturaldifferencessignificantTaxstrategies:ShareforshareacquisitionsmaydefertaxliabilityfortargetfirmshareholdersCashforshareacquisitionsmaytriggertaxliabilityfortargetfirmshareholdersWhyiscashthepreferredformofpaymentinmostcross-borderM&As?ImplementingCross-BorderTransactionsinDevelopedCountriesCont’d.AcquisitionsbyU.S.andNon-U.SacquirersofforeignbusinessesAcquisitionvehicle:Corporate-likestructuresincommonlawcountries(e.g.,U.S.);sharecompaniesorlimitedliabilitycountriesincivillawnations(e.g.,China)Formofpayment:GenerallycashFormofacquisition:ShareacquisitionsgenerallysimplestPost-closingorganization:Holdingcompanystructureiftargettobeoperatedasindependentunitorintegratedwithacquirer’sexisting“in-country”operationsTaxstrategies:HighlycomplexandvarywithlocaltaxandlegaljurisdictionsImplementingCross-BorderTransactionsinEmergingCountriesPoseschallengesnotcommontodevelopedcountriessuchaspoliticalandeconomicrisksincluding:Excessivelocalgovernmentregulation;Confiscatorytaxpolicies;Restrictionsoncashremittances;Currencyinconvertibility;Expropriationofforeignassets;Localcorruption;andCivilwarandlocalinsurgenciesManagingriskthroughinsurance(e.g.,OPIC,WorldBank)andcontractoptions(e.g.,puts)ValuingCross-BorderTransactionsMethodologysimilartothatemployedwhenacquirerandtargetinsamecountryDiscountedcashflow(i.e.,convertingfuturecashflowstoapresentvalue)Relativevaluationmultiples(i.e.,purchasepriceasamultipleofthetargetfirm’sannualrevenue)Basicdifferencesbetweenwithincountryandcross-borderincludethefollowing:NeedtoconverttargetcashflowprojectionsintoacquirerhomecountrycurrencyAdjustingdiscountrate1forrisksuncommonin“withincountry”valuations(e.g.,political/businessrisk,exchangeraterisk)1Thediscountrateisthecostofcapitalusedtoconvertfuturecashflowstoapresentvalue.ProjectingFutureCurrencyExchangeRatesObjective:Converttarget(localcountry)projectedcashflowsintoacquirer(homecountry)currencyHow:Predictforward(futurespot)exchangeratesbasedoninterestrateparity(IRP)orpurchasingpowerparity(PPP)theoriesSpotexchangerates($/€)=thecurrentnumberofdollarsrequiredtobuyoneEuroForwardexchangerate=therateatwhichabankiswillingtoexchangeonedollarforoneEuroatsomespecifiedfuturedateForwardexchangeratesaredeterminedbydifferencesbetweeninterestrates(IRP)andprices(PPP)inthetwocountriesInterestRateParityTheoryProjectingtheForwardDollar/EuroExchangeRateBasedonU.S.InterestRatesComparedtoEurozoneCountryInterestRates:($/€)n/($/€)0=(1+R$n)n/(1+R€n)n($/€)n={(1+R$n)n/(1+R€n)n}x($/€)0

Where($/€)n=Forward$exchangeratenperiodsintothefuture($/€)0=$/EurospotrateR$n=InterestrateinU.S.R€n=InterestrateinEuropeanUnionProjectingtheForwardEuro/DollarExchangeRateBasedonEurozoneCountryInterestRatesComparedtoU.S.InterestRates:(€/$)n/(€/$)0=(1+R€n)n/(1+R$n)n(€/$)n={(1+R€n)n/(1+R$n)n}x(€/$)0

Where(€/$)n=ForwardEuroexchangeratenperiodsintothefuture(€/$)0=Euro/$spotrate

201220132014Target’sEuro-Denominated€124.5€130.7€136.0FCFFCashFlows(€Millions)TargetCountry’sInterestRate(%)4.504.705.30U.S.InterestRate(%)4.254.354.55CurrentSpotRate($/€)=1.2044ProjectedSpotRate($/€)=1.20151.19641.1788Target’sDollar-Denominated$149.59a

$156.37$160.32FCFFCashFlows($Millions)Notes:CalculatingtheprojectedspotrateusingInterestRateParity.($/€)2012

={(1.0425)/(1.0450)}x1.2044=1.2015($/€)2013

={(1.0435)2/(1.0470)2}x1.2044=1.1964($/€)2014

={(1.0455)3/(1.0530)3}x1.2044=1.1788

ConvertingEuro-DenominatedintoDollar-DenominatedFreeCashFlowstotheFirm

UsingInterestRateParityTheory

a$149.59=€124.5x1.2015

PurchasingPowerParityTheoryProjectingtheForwardDollar/PesoExchangeRateBasedonU.S.PriceLevelsComparedtoMexicanPriceLevels:($/Peso)n/($/Peso)0

=(1+Pus)n/(1+Pmex)n

($/Peso)n=((1+Pus)n/(1+Pmex)n)x($/Peso)0

Where($/Peso)n=Forward$/Pesoexchangeratenperiodsintothefuture($/Peso)0=Spot$/PesoexchangeratePus=ExpectedU.S.inflationratePmex=ExpectedMexicaninflationrate

ProjectingtheForwardPeso/DollarExchangeRateBasedonMexicanPriceLevelsComparedtoU.S.PriceLevels:(Peso/$)n/(Peso/$)0=(1+Pmex)n/(1+Pus)n(Peso/$)n=((1+Pmex)n/(1+Pus)n)x(Peso/$)0Where(Peso/$)n=ForwardPeso/$exchangeratenperiodsintothefuture(Peso/$)0=SpotPeso/$exchangerate

201220132014Target’sPeso-DenominatedP1,050.5P1,124.7P1,202.7FCFFCashFlows(MillionsofPesos)MexicanExpectedInflationRate=6%U.S.ExpectedInflationRate=4%SpotRate($/Peso)=.0877ProjectedSpotRate($/Peso).0860.0844.0828Target’sDollar-Denominated$90.34a

$94.92$99.58FCFFCashFlows(Millionsof$)

Notes:CalculatingtheprojectedspotrateusingPurchasingPowerParity.($/Peso)2012

={(1.04)/(1.06)}x.0877=.0860($/Peso)2013

={(1.04)2/(1.06)2}x.0877=.0844($/Peso)2014

={(1.04)3/(1.06)3}x.0877=.0828a$90.34=P1,050.5x.0860

ConvertingPeso-DenominatedInto

DollarDenominatedFreeCashFlowstotheFirm

UsingPurchasingPowerParityTheory

EstimatingCostofEquityforDevelopedCountries

Developedcountriesexhibitlittledifferencesincostofequitybecauseofgloballyintegratedcapitalmarkets.Therefore,theGlobalCAPMcanbewrittenasfollows:ke,dev=Rf+?devfirm,global(Rm–Rf)+FSPWhereke,dev=RequiredreturnonequityforafirminadevelopedcountryRf=Localcountry’srisk-freerateofreturnifcashflowsinlocalcurrencyorU.S.treasurybondrateifindollars?devfirm,global=Nondiversifiableriskforgloballydiversifiedportfolioorwell-

diversifiedportfoliohighlycorrelatedwiththeglobalportfolio(Rm–Rf)=Differenceinexpectedreturnonglobalmarketportfolio,U.S.equityindex,orbroadlydefinedindexinthelocalcountryandtheRfFSP=Premiumsmallfirmsmustearntoattractinvestors

KeyPoint:Whencapitalmarketsarefullyintegrated,equityinvestorsholdgloballydiversifiedportfoliosandtheequitypremiumisthesameforallinvestorswhenmeasuredinthesamecurrency.EstimatingCostofEquityforEmergingCountriesEmergingcountriesmayexhibitsignificantdifferencesinthecostofequityduetosegmentedcapitalmarkets.Therefore,theCAPMmaybewrittenasfollows:ke,em=Rf+?emfirm,global(Rcountry–Rf)+FSP+CRPwhereRf=LocalriskfreerateorU.S.treasurybondrateconvertedtoalocalnominalrateifcashflowsareinthelocalcurrency;ifcashflowsindollars,theU.S.treasuryrate(Rcountry–Rf)=Differencebetweenexpectedreturnonabroadlydefinedequityindexinthelocalcountryorinasimilarcountryandtheriskfree

rate?emfirm,global=Emergingcountryfirm’sglobalbetaCRP=Specificcountryriskpremiumexpressedasdifferencebetweenthelocalcountry’s(orasimilarcountry’s)governmentbondrateandtheU.S.treasurybondrateofthesamematurityFSP=PremiumsmallfirmsmustearntoattractinvestorsKeyPoint:Foremergingcountries,theequityriskpremiummaynotreflectalltheriskassociatedwithinvestinginthatcountryandthecostofequitymayhavetobeadjustedforsuchthingsaspoliticalrisk.EstimatingtheCostofDebtFordevelopedcountries,thetarget’slocalortheacquirer’shomecountrycostofdebt.Foremergingcountries,thecostofdebt(iemfirm)isasfollows: iemfirm=Rf+CRP+FRPWhereRf=Riskfreerate(seeprecedingslide.)CRP=Specificcountryriskpremium(seeprecedingslide)FRP=Firm’sdefaultriskpremium(i.e.,additionalpremiumforsimilarfirmsratedbycreditratingagenciesorestimatedbycomparinginterestcoverageratiosusedbyratingagenciestothefirm’sinterestcoverageratiostodeterminehowtheywouldratethefirm.)EvaluatingEmergingCountryRisk

UsingScenarioPlanningRiskmaybeincorporatedintothevaluationbyconsideringalternativeeconomicscenariosfortheemergingcountry.ProjectedcashflowsforalternativescenarioscouldreflectdifferentGDPgrowthrates,inflationrates,interestrates,foreignexchangerates,oralternativepoliticalconditions.Ifriskisincludedbycalculatingaweightedaverageofalternativescenarios,thediscountrateshouldnotbeadjustedforspecificcountryrisk.FinancialReturnstoCross-BorderMergersandAcquisitionsCombined“excess”financialreturns1(includingacquirerandtargetfirmshareholders)inM&Atransactionsworldwideaverage15%ontheannouncementdate.(Returnsmayvarywiththecharacteristicsofthedeal,e.g.,hostileversusfriendly)MostofthecombinedfinancialreturnisearnedbytargetfirmshareholdersAcquiringfirmshareholdersexperience“excess”financialreturnsof1to1.5%KeyPoint:Contrarytoconventionalwisdom,acquisitionsonaverage

createvalueforbothacquirerandtargetfirmshareholders.1Excessfinancialreturnsarethoserealizedoverandabovewhatwouldhavebeenearnedhadnoacquisitionoccurred.Source:JeffreyNetter,MikeStegemoller,andM.BabajideWintoki,ImplicationsofDataScreensonMergerandAcquisitionAnalysis:ALargeSampleStudyofMergersandAcquisitionsfrom1992to2009,ReviewofFinancialStudies,24,2011,pp.2242-2285.Resultsreflect311,894transactionsbetween1992and2009.NestleBuysControllingInterestinChineseCandyMaker:CaseStudyBackgroundAcquirer:NestleCorporation(World’slargestfoodcompany)NestleoperatedinChinafor20yearsandcurrentlyhassalesof$3.3billionOperates23plantsandhas14,000employeesNestleintendstogrowemergingmarket’sshareoftotalrevenuefromone-thirdin2010to45%by2020Target:HsuFuChi(China’slargestconfectionaryproductsmanufacturer)$800millioninannualrevenueand$91millioninprofit6.6%marketshareandestablishednationwidedistributionnetworkandretailoutletchainHsufamilyandBaringPrivateEquityAsiaown57%and15%ofshares,respectively.Remainingsharesownedbynon-foundingfamilyandnon-institutionalshareholders…so-calledindependentshareholdersAnnouncementDate:July11,2011SharestradedonSingaporestockexchangeSellat21%discounttocomparablefirmsHaveunderperformedpeersduringlastseveralyearsDealCharacteristicsNestleofferpriceequivalentto$1.7billionU.S.dollarsfora60%ownershipstake,whichrepresented3.3timesHsuFuChi’sannualrevenueNestletobuy43.6%offirm’ssharesfromindependentshareholdersfor4.35Singaporedollars(equivalentto3.65U.S.dollars)anda16.5%stakefromtheHsufoundingfamily.Thepurchasepricerepresenteda24%premiumoverthe6monthsendingonJuly1,2011.HsuFuChi’scurrentCEOandChairmanwouldcontinuetomanagethefirmPotentialSynergiesFromNestlé'sPerspective:IncreasesexposuretoChina’sfastgrowingconsumermarketProvidesaplatformforfutureacquisitionsinthefoodindustryinChinaHsuFuChi’sestablishednationaldistributionnetworkandchainofretailoutletsprovidesbarriertoentryforpotentialcompetitorsFromHsuFuChi’sPerspective:EnablesbothHsufamilyandindependentshareholdersto“cashout”ofaportionoftheirinvestmentProvidesresourcesforpotentialinternationalexpansionProvidesglobalbrandanddistributionnetworktosupportinternationalexpansionComparableValuati