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Mergers, Acquisitions, and Corporate Restructurings, 6th Edition

Book Description

The comprehensive guide to mergers, acquisitions, and corporate restructurings

Mergers, Acquisitions, and Corporate Restructurings is an all-inclusive guide to M&As that illustrates how restructuring can be used successfully, how each form works, and the laws that govern them. This updated edition includes the latest statistics, research, graphs, and case studies on the private equity market, ethics, legal frameworks, and corporate governance, presented in a more approachable, manageable way. Written from a practical and historical perspective, this book carefully analyzes the strategies and motives that inspire M&As, the legalities involved each step of the way, and the offensive and defensive techniques used during hostile acquisitions.

Corporate restructurings are indispensable in building a new generation of re-engineered companies with the power and resources to compete on the global playing field. This book covers the full spectrum of transactions, from megadeals to downsizing, and takes a fresh look at restructuring and how it is being used to revitalize and supercharge companies.

  • Learn how corporate restructuring helps companies compete

  • Discover the common impetus behind M&As

  • Understand the laws and rules that govern the field

  • Examine more effective strategies for hostile acquisitions

  • The slowdown in the world's economy means that mergers and corporate restructuring will likely increase. It is essential for students and professionals to fully understand the concepts and mechanics behind these transactions, and Mergers, Acquisitions, and Corporate Restructurings is the comprehensive guide to the field.

    Table of Contents

    1. Cover Page
    2. Title Page
    3. Copyright
    4. Contents
    5. Preface
    6. Part I: Background
      1. Chapter 1: Introduction
        1. RECENT M&A TRENDS
        2. TERMINOLOGY
        3. VALUING A TRANSACTION
        4. TYPES OF MERGERS
        5. MERGER CONSIDERATION
        6. MERGER PROFESSIONALS
        7. MERGER ARBITRAGE
        8. LEVERAGED BUYOUTS AND THE PRIVATE EQUITY MARKET
        9. CORPORATE RESTRUCTURING
        10. MERGER NEGOTIATIONS
        11. MERGER AGREEMENT
        12. MERGER APPROVAL PROCEDURES
        13. DEAL CLOSING
        14. SHORT-FORM MERGER
        15. FREEZE-OUTS AND THE TREATMENT OF MINORITY SHAREHOLDERS
        16. REVERSE MERGERS
        17. HOLDING COMPANIES
      2. Chapter 2: History of Mergers
        1. MERGER WAVES
        2. WHAT CAUSES MERGER WAVES?
        3. FIRST WAVE, 1897–1904
        4. SECOND WAVE, 1916–1929
        5. THE 1940S
        6. THIRD WAVE, 1965–1969
        7. TRENDSETTING MERGERS OF THE 1970S
        8. FOURTH WAVE, 1984–1989
        9. FIFTH WAVE
        10. SIXTH MERGER WAVE
      3. Chapter 3: Legal Framework
        1. LAWS GOVERNING MERGERS, ACQUISITIONS, AND TENDER OFFERS
        2. OTHER SPECIFIC TAKEOVER RULES IN THE UNITED STATES
        3. INTERNATIONAL SECURITIES LAWS RELATING TO TAKEOVERS
        4. U.S. STATE CORPORATION LAWS AND LEGAL PRINCIPLES
        5. STATE ANTITAKEOVER LAWS
        6. REGULATION OF INSIDER TRADING
        7. ANTITRUST LAWS
        8. MEASURING CONCENTRATION AND DEFINING MARKET SHARE
        9. EUROPEAN COMPETITION POLICY
      4. Chapter 4: Merger Strategy
        1. GROWTH
        2. SYNERGY
        3. OPERATING SYNERGY
        4. DIVERSIFICATION
        5. TYPES OF FOCUS INCREASES
        6. FOCUS INCREASING ASSET SALES INCREASE FIRM VALUES
        7. EXPLANATION FOR THE DIVERSIFICATION DISCOUNT
        8. DO DIVERSIFIED OR FOCUSED FIRMS DO BETTER ACQUISITIONS?
        9. OTHER ECONOMIC MOTIVES
        10. HUBRIS HYPOTHESIS OF TAKEOVERS
        11. DO MANAGERIAL AGENDAS DRIVE M&A?
        12. OTHER MOTIVES
    7. Part II: Hostile Takeovers
      1. Chapter 5: Antitakeover Measures
        1. MANAGEMENT ENTRENCHMENT HYPOTHESIS VERSUS STOCKHOLDER INTERESTS HYPOTHESIS
        2. RIGHTS OF TARGETS BOARDS TO RESIST: UNITED STATES COMPARED TO THE REST OF THE WORLD
        3. PREVENTATIVE ANTITAKEOVER MEASURES
        4. CHANGING THE STATE OF INCORPORATION
        5. ACTIVE ANTITAKEOVER DEFENSES
        6. INFORMATION CONTENT OF TAKEOVER RESISTANCE
      2. Chapter 6: Takeover Tactics
        1. PRELIMINARY TAKEOVER STEPS
        2. TENDER OFFERS
        3. ADVANTAGES OF TENDER OFFERS OVER OPEN MARKET PURCHASES
        4. PROXY FIGHTS
      3. Chapter 7: Hedge Funds as Activist Investors
        1. MACROECONOMIC FOUNDATIONS OF THE GROWTH OF ACTIVIST FUNDS
        2. HEDGE FUNDS AS ACQUIRERS
    8. Part III: Going-Private Transactions and Leveraged Buyouts
      1. Chapter 8: Going-Private Transactions and Leveraged Buyouts
        1. TERMINOLOGY
        2. HISTORICAL TRENDS IN LBOS
        3. MANAGEMENT BUYOUTS
        4. CONFLICTS OF INTEREST IN MANAGEMENT BUYOUTS
        5. U.S. COURTS' POSITION ON LEVERAGED BUYOUT CONFLICTS
        6. FINANCING FOR LEVERAGED BUYOUTS
        7. RETURNS TO STOCKHOLDERS FROM LBOS
        8. RETURNS TO STOCKHOLDERS FROM DIVISIONAL BUYOUTS
        9. EMPIRICAL RESEARCH ON WEALTH TRANSFER EFFECTS
        10. PROTECTION FOR CREDITORS
        11. INTRA-INDUSTRY EFFECTS OF BUYOUTS
      2. Chapter 9: The Private Equity Market
        1. HISTORY OF THE PRIVATE EQUITY AND LBO BUSINESS
        2. PRIVATE EQUITY MARKET
        3. SECONDARY MARKET FOR PRIVATE EQUITY INVESTMENTS
      3. Chapter 10: The Junk Bond and the Leveraged Loan Market and Stapled Financing
        1. HISTORY OF THE JUNK BOND MARKET
        2. LEVERAGED LOAN MARKET
        3. STAPLED FINANCING
    9. Part IV: Corporate Restructuring
      1. Chapter 11: Corporate Restructuring
        1. DIVESTITURES
        2. DIVESTITURE AND SPIN-OFF PROCESS
        3. MARKET LIQUIDITY AND THE DECISION TO DIVEST A UNIT
        4. ROUND-TRIP WEALTH EFFECTS
        5. WEALTH EFFECTS OF SELL-OFFS
        6. MANAGERIAL OWNERSHIP AND SELL-OFF GAINS
        7. ACTIVISTS AND SELL-OFFS
        8. SHAREHOLDER WEALTH EFFECTS OF SPIN-OFFS: U.S. VERSUS EUROPE
        9. EQUITY CARVE-OUTS
        10. VOLUNTARY LIQUIDATIONS OR BUST-UPS
        11. TRACKING STOCKS
        12. MASTER LIMITED PARTNERSHIPS AND SELL-OFFS
      2. Chapter 12: Restructuring in Bankruptcy
        1. TYPES OF BUSINESS FAILURE
        2. CAUSES OF BUSINESS FAILURE
        3. BANKRUPTCY TRENDS
        4. U.S. BANKRUPTCY LAWS
        5. REORGANIZATION VERSUS LIQUIDATION
        6. REORGANIZATION PROCESS
        7. BENEFITS OF THE CHAPTER 11 PROCESS FOR THE DEBTOR
        8. PREPACKAGED BANKRUPTCY
        9. WORKOUTS
        10. CORPORATE CONTROL AND DEFAULT
        11. LIQUIDATION
        12. INVESTING IN THE SECURITIES OF DISTRESSED COMPANIES
      3. Chapter 13: Corporate Governance
        1. STRUCTURE OF CORPORATIONS AND THEIR GOVERNANCE
        2. GOLDEN PARACHUTES
        3. CEO SEVERANCE PAYMENTS
        4. REFORM OF EXCESSES OF GOLDEN PARACHUTES AND SEVERANCE PAYMENTS
        5. MANAGERIAL COMPENSATION, MERGERS, AND TAKEOVERS
        6. CEO COMPENSATION AND POWER
        7. COMPENSATION CHARACTERISTICS OF BOARDS THAT ARE MORE LIKELY TO KEEP AGENCY COSTS IN CHECK
        8. ROLE OF THE BOARD OF DIRECTORS
        9. REGULATORY STANDARDS FOR DIRECTORS
        10. ANTITAKEOVER MEASURES AND BOARD CHARACTERISTICS
        11. DISCIPLINARY TAKEOVERS, COMPANY PERFORMANCE, CEOS, AND BOARDS
        12. MERGER STRATEGY AND CORPORATE GOVERNANCE
        13. CEO COMPENSATION AND M&A PROGRAMS
        14. DO BOARDS REWARD CEOS FOR INITIATING ACQUISITIONS AND MERGERS?
        15. CEO COMPENSATION AND DIVERSIFICATION STRATEGIES
        16. AGENCY COSTS AND DIVERSIFICATION STRATEGIES
        17. INTERESTS OF DIRECTORS AND M&AS
        18. MANAGERIAL COMPENSATION AND FIRM SIZE
        19. CORPORATE CONTROL DECISIONS AND THEIR SHAREHOLDER WEALTH EFFECTS
        20. DOES BETTER CORPORATE GOVERNANCE INCREASE FIRM VALUE?
        21. CORPORATE GOVERNANCE AND COMPETITION
        22. EXECUTIVE COMPENSATION AND POSTACQUISITION PERFORMANCE
        23. MERGERS OF EQUALS AND CORPORATE GOVERNANCE
      4. Chapter 14: Joint Ventures and Strategic Alliances
        1. CONTRACTUAL AGREEMENTS
        2. COMPARING STRATEGIC ALLIANCES AND JOINT VENTURES WITH MERGERS AND ACQUISITIONS
        3. JOINT VENTURES
        4. STRATEGIC ALLIANCES
      5. Chapter 15: Valuation
        1. VALUATION METHODS: SCIENCE OR ART?
        2. MANAGING VALUE AS AN ANTITAKEOVER DEFENSE
        3. BENCHMARKS OF VALUE
        4. HOW THE MARKET DETERMINES DISCOUNT RATES
        5. VALUATION OF THE TARGET'S EQUITY
        6. MARKETABILITY OF THE STOCK
        7. TAKEOVERS AND CONTROL PREMIUMS
        8. VALUATION OF STOCK-FOR-STOCK EXCHANGES
        9. SHAREHOLDER WEALTH EFFECTS AND METHODS OF PAYMENT
        10. EXCHANGE RATIO
        11. FIXED NUMBER OF SHARES VERSUS FIXED VALUE
        12. MERGER NEGOTIATIONS AND STOCK OFFERS: HALLIBURTON VS BAKER HUGHES
        13. INTERNATIONAL TAKEOVERS AND STOCK-FOR-STOCK TRANSACTIONS
        14. DESIRABLE FINANCIAL CHARACTERISTICS OF TARGETS
      6. Chapter 16: Tax Issues in M&A
        1. FINANCIAL ACCOUNTING FOR M&AS
        2. TAXABLE VERSUS TAX-FREE TRANSACTIONS
        3. TAX CONSEQUENCES OF A STOCK-FOR-STOCK EXCHANGE
        4. ASSET BASIS STEP-UP
        5. CHANGES IN THE TAX LAWS
        6. ROLE OF TAXES IN THE MERGER DECISION
        7. ROLE OF TAXES IN THE CHOICE OF SELL-OFF METHOD
        8. ORGANIZATIONAL FORM AND M&A PREMIUMS
        9. CAPITAL STRUCTURE AND PROPENSITY TO ENGAGE IN ACQUISITIONS
        10. LEVERAGE AND DEAL STRUCTURE
        11. TAXES AS A SOURCE OF VALUE IN MANAGEMENT BUYOUTS
        12. MISCELLANEOUS TAX ISSUES
    10. Glossary
    11. Index