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Unit outline_

FINC6017: Mergers and Acquisitions

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

Mergers and acquisitions have become perhaps the most important activity of investment banks today. They provide a fundamental way for businesses to secure growth. To analyse mergers and acquisitions, most tools from modern financial economics are needed. The unit commences with a review of how existing businesses are valued, continues with an analysis of capital structure decisions, considers management incentives and examines issues in corporate control. It then examines the motives for mergers and acquisitions. Some acquisitions are motivated by value improvements created by correcting incentive problems, some acquisitions, however, are motivated by bad incentives that decrease value.

Unit details and rules

Academic unit Finance
Credit points 6
Prerequisites
? 
FINC5001
Corequisites
? 
None
Prohibitions
? 
ACCT6011
Assumed knowledge
? 

None

Available to study abroad and exchange students

Yes

Teaching staff

Coordinator Wei Cui, wei.cui@sydney.edu.au
Type Description Weight Due Length
Final exam (Record+) Type B final exam Final exam
Online exam, details will be provided on Canvas.
50% Formal exam period 2 hours
Outcomes assessed: LO1 LO2 LO3 LO4 LO5 LO6
In-semester test (Record+) Type B in-semester exam Mid-semester exam
Online test, Details will be provided on Canvas.
20% Week 07
Due date: 14 Oct 2020 at 19:00
1 hour
Outcomes assessed: LO1 LO2 LO3 LO4 LO6
Assignment group assignment Assignment
Group work, details will be provided on Canvas.
30% Week 10
Due date: 06 Nov 2020 at 23:59
2500 words
Outcomes assessed: LO1 LO2 LO3 LO4 LO5 LO6
group assignment = group assignment ?
Type B final exam = Type B final exam ?
Type B in-semester exam = Type B in-semester exam ?

Assessment summary

  • Mid-semester exam: This exam will cover all unit materials from weeks 1 to 5 (inclusive), including lecture notes and tutorial content. The objective of this exam is to give you feedback on your learning through the first half of the unit.
  • Assignment: The group assignment gives you the opportunity to apply your critical reasoning and analytical problem-solving skills to a recent merger and acquisition case study while building effective communication and group work skills. Groups will ideally consist of 4-5 students.
  • Final exam: This is an online exam and will consist of multiple choice, short-answer, and problem-solving questions. The final exam will test your overall knowledge and understanding of the materials covered in the unit and your 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 merger and acquisition environment and specific deals, apply valuation tools and evaluation methodologies to determine the outcomes of merger and acquisition scenarios; and compare and critique alternative corporate strategies and deal structures.

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 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.

Use of generative artificial intelligence (AI) and automated writing tools

You may only use generative AI and automated writing tools in assessment tasks if you are permitted to by your unit coordinator. If you do use these tools, you must acknowledge this in your work, either in a footnote or an acknowledgement section. The assessment instructions or unit outline will give guidance of the types of tools that are permitted and how the tools should be used.

Your final submitted work must be your own, original work. You must acknowledge any use of generative AI tools that have been used in the assessment, and any material that forms part of your submission must be appropriately referenced. For guidance on how to acknowledge the use of AI, please refer to the AI in Education Canvas site.

The unapproved use of these tools or unacknowledged use will be considered a breach of the Academic Integrity Policy and penalties may apply.

Studiosity is permitted unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission as detailed on the Learning Hub’s Canvas page.

Outside assessment tasks, generative AI tools may be used to support your learning. The AI in Education Canvas site contains a number of productive ways that students are using AI to improve their learning.

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 M&A introduction and the overview of M&A market Lecture (2 hr) LO1 LO2 LO3
Week 02 M&A introduction and the overview of M&A market Tutorial (1 hr) LO1 LO2 LO3
Assessing M&A outcomes Lecture (2 hr) LO1 LO4 LO6
Week 03 Assessing M&A outcomes Tutorial (1 hr) LO1 LO4 LO6
Merger Waves, M&A in Australia and the US Lecture (2 hr) LO1 LO3
Week 04 Merger Waves, M&A in Australia and the US Tutorial (1 hr) LO1 LO3
Economics of M&A Lecture (2 hr) LO1 LO2 LO3
Week 05 Economics of M&A Tutorial (1 hr) LO1 LO2 LO3
Deal valuation I Lecture (2 hr) LO4 LO6
Week 06 Deal valuation I Tutorial (1 hr) LO4 LO6
Deal valuation II Lecture (2 hr) LO4 LO6
Week 07 Mid-semester exam Lecture and tutorial (3 hr) LO1 LO2 LO3 LO4 LO6
Week 08 Deal valuation II Tutorial (1 hr) LO4 LO6
Forms of payment I Lecture (2 hr) LO3 LO4 LO5 LO6
Week 09 Forms of payment I Tutorial (1 hr) LO3 LO4 LO5 LO6
Forms of payment II Lecture (2 hr) LO3 LO4 LO5 LO6
Week 10 Forms of payment II Tutorial (1 hr) LO3 LO4 LO5 LO6
Alternatives to M&A, Corporate restructuring Lecture (2 hr) LO2 LO3
Week 11 Alternatives to M&A, Corporate restructuring Tutorial (1 hr) LO2 LO3
Hostile takeover, merger arbitrage Lecture (2 hr) LO1 LO2 LO5 LO6
Week 12 Hostile takeover, merger arbitrage Tutorial (1 hr) LO1 LO2 LO5 LO6
LBO, course revision Lecture (2 hr) LO1 LO2 LO3 LO4 LO5 LO6

Attendance and class requirements

Lecture recordings: All lectures and tutorials are 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.

  • 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 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 M&A deal, and determine optimal deal structures.
  • LO5. identify various classes of risk management tools used in mergers and acquisitions and their advantages and weaknesses. Assess the risks of M&A implementation
  • LO6. conduct research using archives, libraries, web-sourced data and other sources of information to produce timely and high-quality work.

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.

The following changes have been made: 1. removed the presentation component in group assignment. 2. schedule teaching contents to align with the University's teaching policy in S2 2020.

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.