The objective of this note is to define what is meant by mergers and acquisitions and to understand why they happen. The impact of these deals on shareholders of both the acquiring and acquired companies is investigated, and the reasons why some mergers succeed while others fail are examined. Finally, in order to determine the value of a firm, some valuation frameworks are provided.
Peter Munk, Chairman and Chief Executive Officer of American Barrick Resources Corporation, had to decide whether or not to make a bid for Lac Minerals. Lac Minerals was recently put into play when Royal Oak Mines made an unsolicited bid.
The vice president of finance at Rocky Mountain High Ski Resort Inc. (RMH) was examining the alternatives for financing a proposed $25 million expansion. The well-known Western Canadian all-season resort planned to add several new runs, additional snowmaking capacity, another high-speed quad chair lift, a 700-seat restaurant, a new retail ski equipment store, and upgrades to the existing infrastructure. The directors of RMH were scheduled to meet in two weeks to approve both the proposed expansion and financing plans.
The producer of a stage show society needs to use network planning as part of project management to ensure that 10 performances are scheduled well over the next four months. Students will have to construct a network diagram, identify the critical path, and address questions regarding activity crashing. What is particularly unique is that they will have to create a list from the data presented to them at a meeting with the assistant producer. (NOTE: This case has two teaching notes: Number 8A95D15 addresses class discussion and Number 5A95D15 uses a Microsoft Project solution file, which is available with this version of the teaching note, product 7A95D015.)
The manager of a medical laboratory must determine the best way to handle necessary layoffs. She has designed a new supervisory structure that will better facilitate the company's objectives toward empowerment and will provide profitable operations despite funding cutbacks. In order to implement the revised structure, she must eliminate five supervisory positions, necessitating the layoffs of five long-term employees. The remaining supervisors' responsibilities will greatly increase. She must determine the logistics for communicating these decisions to the supervisors and their staff without hindering morale and productivity. (A related case, Medictest Laboratories (B), case 9A94J031, outlines how Jean proceeded.)
The manager of a medical laboratory must determine the best way to communicate a cutback decision. She has designed a new supervisory structure that will better facilitate the company's objectives toward empowerment and will provide profitable operations despite funding cutbacks. This is a detailed description of Jean Kelly's action plan proceeding from Medictest Laboratories (A), case 9A94J030.
A young recent graduate has just been hired as a consultant by the tired owner of a small syndicate. His task is to solve the many problems existing within the various businesses, including restaurants, real estate, and a retirement home. The financial situation is severe and there are several personnel conflicts. He must resolve these problems while effectively managing the owner.
In the mid-1990s McLeod Motors rationalized a number of motor end shields to reduce manufacturing costs, improve service, and reduce inventories. However, inventories have apparently risen. Students must identify why McLeod has inventory, how large the inventory might have been before the rationalization, how large they might be now, why they are so large, and what could be done to reduce inventory levels. The case can be used in conjunction with a discussion on inventory function.
In order to increase revenues, develop new technologies, and manage information technology more efficiently, Xerox decided to sign a 10-year, $3.2 billion contract with Electronic Data Systems (EDS). This case describes the events that preceded Xerox's decision to outsource information technology.
Anasazi, a hair-care products start-up based in the Midwest, is having growing pains as it tries to develop a new distribution model for the professional hair salon industry. The company has completed several rounds of venture financing but, to continue, needs to raise more capital earlier than expected. It goes through a process of refining and refocusing its strategy to raise the new funds.