Self-Study

Financial and Strategic Implications of Mergers and Acquisititons

  • Tuesday, May 1, 2018 – Tuesday, April 30, 2019

  • 2.5
    CREDITS
    Finance

This CPE course classifies mergers and acquisitions and explores reasons why entities merge or acquire. It defines Big Data, synergy, and the impact of mergers and acquisitions on stakeholders. It examines tax implications, the role and scope of competition authorities, and methods of divestment. The course also investigates how management can purchase a business from its existing owners, and studies exit strategies. It focuses on practical matters such as what form of consideration should be used in an acquisition (for example, cash or a share exchange) and the negotiation process that surrounds a bid. It explores types of defenses against hostile bids, and how to derive entity values using the bootstrapping method.

Objectives

  • Identify reasons for and against acquisitions, mergers and divestments (e.g. strategic position, synergistic benefits, big data opportunities, risks and tax implications)
  • Recognize the interests of different stakeholder groups
  • Recognize taxation implications (group loss relief, differences in taxation rates, withholding tax, double tax treaties)
  • Recognize the process and implications of a management buy-out, including potential conflicts of interest
  • Recognize the function of acquisition by private equity or venture capitalist
  • Identify the role of competition authorities in relation to mergers and acquisitions
  • Select the appropriate form of consideration and terms for acquisitions and recognize their impact on shareholders, including taxation impact
  • Calculate an appropriate bid price, including identifying the methods and implications of financing a cash offer and refinancing target entity debt
  • Identify key defenses in hostile takeovers
  • Calculate the potential post-transaction value for both acquirer and seller

Highlights

  • Recognition of the interests of different stakeholder groups
  • Reasons for and against acquisitions, mergers and divestments
  • Taxation implications
  • Process and implications of a management buy-out, including potential conflicts of interest
  • Role/function/implications of acquisition by private equity or venture capitalist
  • Role and scope of competition authorities in relation to mergers and acquisitions
  • Forms of consideration and terms for acquisitions and their impact on shareholders, including taxation impact
  • Treatment of target entity debt (settlement, refinancing)
  • Methods and implications of financing a cash offer and refinancing target entity debt
  • Bid negotiation including agency issues
  • Potential post-transaction value for both acquirer and seller
  • Integration of management/systems and effective realization of synergistic benefits
  • Types of exit strategies and their implications

Additional Information

Designed For

CGMA exam candidates
Management accountants wanting to develop skills in corporate financial strategy

Vendor

American Institute of CPAs

Field of Study

Finance

Course Number

18AIS0178

Level of Knowledge

Intermediate

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