INTEGRATION

Delft Belting: An acquisition simulation

Professor Duncan Angwin

2011

Introduction

We have recently lived through the greatest merger and acquisition boom in history. Billions

of dollars have been spent in reshaping companies, industries and even economies. There are

some serious concerns over the actual success of these endeavours. Now again we see a

revival in global M&A activity. Managers, again are having to justify their deals and wrestle

with managing their purchases. They need to show ex-ante and ex-post that such deals are

worthwhile.

Mergers and acquisitions is a useful topic for an integration session as it impinges on many of

the classical disciplines studied during an MBA programme. For instance, economics often

underlies explanation for why acquisitions take place, finance theories explain valuation,

organisational behaviour and design theories give insight into how the businesses and

employees may work together, psychology shows how living through such deals impacts

upon individuals. There is also a rich area here for interdisciplinary work as in recent years

each of these disciplines have recognised limitations in the contributions of other disciplines

and have sought to widen their own contributions to the field. For instance, whilst economic

and financial theories underpin why M&A occur, there are very significant issues revolving

around managerial and investor motives which do not happily fit within these disciplines.

Although in some domestic deals, acquirers and their advisors are able to replicate

methodologies and procedures learned from past experience, in many cases, particularly cross

border deals, uncertainty and learning are more the norm. Indeed, many experienced deal

doers say the most common thing about M&A is that each deal is different and one should

start with a blank piece of paper. To illustrate this ‘uncertainty’ and the importance of

crafting ones own approach, the following is the first cross border approach by a Japanese

firm – where there were no precedents to guide them, or their advisors.

Content

After an opening review of Mergers and Acquisitions as strategy and process, participants

will be taken through a simulation of a real cross border acquisition. The simulation mirrors

the unfolding and execution of a purchase in Holland, by a large Japanese business using a

UK Investment Bank. As the simulation evolves, participants will be able to draw upon the

many perspectives they may be aware of, such as those learned through an MBA programme,

to help them interpret and act in this context, as they attempt in teams to negotiate a

successful deal.

Objectives

To enable participants to

Reflect upon and use their MBA materials (students should be prepared to consult

information they will have received from earlier modules)

Think strategically about a new business opportunity and how this may be managed.

understand the advantages and disadvantages of M&A as a strategy for growth

understand how teams behave and perform when tackling complex and uncertain

business situations

bring together a broad range of business knowledge and learning in order to

understand and make decisions about an uncertain project

plan ahead to capture value from a strategic opportunity

Learning Outcomes

Understand how an acquisition process works

Appreciate the many components of putting a deal together

Recognise the distorting effects of process upon outcomes

Understand the complexities of managing multiple outcomes with different

stakeholders

Understand how different academic disciplines need to be integrated for effective

results

Recognise the importance of leadership and team management under uncertain time

pressured conditions

Recognise how the multiple components of an MBA can, and should be integrated for

good results

Pre-course preparation

No formal preparation is required. However, participants will find it useful to be aware of

other M&A deals and their outcomes.

----------------------------------------------------------------------