M&A modeling final EXAM LATEST VERSION 2025
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A
Who sold Miller Brewing to restructure? - CORRECT ANSWER-Philip Morris
5 deals in Brewing Industry: (are they friendly? what is there structure?) -
CORRECT ANSWER-(1) South Af. Brewing buys Miller (2) Interbrew buys AmBev
(3) Coors buys Molson (4) SABMiller buys Molson Coors (5) InBev buys Anheuser
Busch .... all are horizontal... all are friendly except for Anheuser Busch
What were the strategic shocks for the Brewing industry over the years? -
CORRECT ANSWER-(1) Political changes -- prohibition / free trade of NAFTA and
EU reducing tarriffs (2) tech changes -- lower shipping costs / better inventory
management through bar codes
Anheuser Busch & InBev deal (3 steps) - CORRECT ANSWER-(1) IB gives "BEAR
HUG LETTER" offering $65/share in cash for AB. (2) IB tries to out AB's board
through -- proxy contest + law suits threatened (3) IB sells Labatt USA to
overcome antitrust concerns centered on increase in prices in north NY (Labatt
was canadian). --- DEFM & vote of target SHs, which means it was a merger / not
friendly / horizontal.
,AB&IB want Modelo (antitrust strategies) - CORRECT ANSWER-(1) DoJ doesn't
want AB&IB to acquire Grupo Modelo for antitrust concerns (2) AB&IB acquire
and sell the US sale rights of Corona to another co. (licenses it) and sells a brewery
that's on the US-Mexico border.
AB&IB and SABMiller (motivators) - CORRECT ANSWER-the first "truly global
beer co." ... ABIB has no presence in Africa... horizontal merger that increases
their presence throughout the world-market.
What's the effect on value in international M&A? - CORRECT ANSWER-(1)
similar to the u.s. (2) targets get significant premiums (3) bidders break even (4)
over all the mergers create value
7 Steps of the Private Takeover Process - CORRECT ANSWER-(1) deal initiation
(2) select advisors (3) contact bidder(s) (4) confidentiality/standstill agreement (5)
Indications of interest (6) formal private bid (7) takeover agreement
Steps of a Public Takeover Process - CORRECT ANSWER-(1) takeover
announcement publically (2) public bidding ....
Strategic Alternatives when your stock is tanking - CORRECT ANSWER-(1) sell
some assets (2) acquire someone (3) be acquired (4) take the company private (5)
generally cut costs
Applebee's International Takeover (Strategic Alternatives) - CORRECT ANSWER-
depressed stock prices led them to (1) menu enhance ... (2) then proxy contest
, threatened, and changes in franchising strategy proposed by activist hedgefund
........(3) FILL IN!!
Maytag Corporation (Strategic Alternatives) - CORRECT ANSWER-Extended
Auction ... (1) Ripplewood (bidder) reaches out to make contact (2) Maytag
engages I-bank as an advisor (3) Ripplewood submits proposal price (4) Maytag
creates special committee (non-managing directors) ... their debt rating drops ...
leading to Ripplewood dropping their offer. (5) Maytag gets a go-shop period to
find a potentially higher bidder... + termination fee for Ripplewood if Ripplewood
doesn't want to match it (6) Whirpool makes an offer, Ripplewood offers
somewhat higher but not higher than Whirlpool. (7) Maytag picks Whirlpool.
Why do international mergers occur? - CORRECT ANSWER-(1) Economic /
Technological changes -- economies of scale of combining... ex. pharma + oil &
gas, should combine bc they need to pay less to produce the same product and
will have broader market (2) Political Change -- trade barriers and how they
change... (EU - a type of deregulation) ... PRIVATIZATION (gov. transferring their
assets to the private sector)
Why is privatization often followed by merger activity? - CORRECT ANSWER-
sometimes the underlying tech change has occurred and the removal of gov.
involvement is the last deregulation action needed before the co.s can capitalize
on the gains from merging
Electric Utility Industry in the UK: - CORRECT ANSWER-(1) was nationalized in
1947 after WWII -- gov. reorganized it on regional basis so it wouldn't fail (12
regional distributors + a few national power generators) (2) Privatized in 1990s by
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A
Who sold Miller Brewing to restructure? - CORRECT ANSWER-Philip Morris
5 deals in Brewing Industry: (are they friendly? what is there structure?) -
CORRECT ANSWER-(1) South Af. Brewing buys Miller (2) Interbrew buys AmBev
(3) Coors buys Molson (4) SABMiller buys Molson Coors (5) InBev buys Anheuser
Busch .... all are horizontal... all are friendly except for Anheuser Busch
What were the strategic shocks for the Brewing industry over the years? -
CORRECT ANSWER-(1) Political changes -- prohibition / free trade of NAFTA and
EU reducing tarriffs (2) tech changes -- lower shipping costs / better inventory
management through bar codes
Anheuser Busch & InBev deal (3 steps) - CORRECT ANSWER-(1) IB gives "BEAR
HUG LETTER" offering $65/share in cash for AB. (2) IB tries to out AB's board
through -- proxy contest + law suits threatened (3) IB sells Labatt USA to
overcome antitrust concerns centered on increase in prices in north NY (Labatt
was canadian). --- DEFM & vote of target SHs, which means it was a merger / not
friendly / horizontal.
,AB&IB want Modelo (antitrust strategies) - CORRECT ANSWER-(1) DoJ doesn't
want AB&IB to acquire Grupo Modelo for antitrust concerns (2) AB&IB acquire
and sell the US sale rights of Corona to another co. (licenses it) and sells a brewery
that's on the US-Mexico border.
AB&IB and SABMiller (motivators) - CORRECT ANSWER-the first "truly global
beer co." ... ABIB has no presence in Africa... horizontal merger that increases
their presence throughout the world-market.
What's the effect on value in international M&A? - CORRECT ANSWER-(1)
similar to the u.s. (2) targets get significant premiums (3) bidders break even (4)
over all the mergers create value
7 Steps of the Private Takeover Process - CORRECT ANSWER-(1) deal initiation
(2) select advisors (3) contact bidder(s) (4) confidentiality/standstill agreement (5)
Indications of interest (6) formal private bid (7) takeover agreement
Steps of a Public Takeover Process - CORRECT ANSWER-(1) takeover
announcement publically (2) public bidding ....
Strategic Alternatives when your stock is tanking - CORRECT ANSWER-(1) sell
some assets (2) acquire someone (3) be acquired (4) take the company private (5)
generally cut costs
Applebee's International Takeover (Strategic Alternatives) - CORRECT ANSWER-
depressed stock prices led them to (1) menu enhance ... (2) then proxy contest
, threatened, and changes in franchising strategy proposed by activist hedgefund
........(3) FILL IN!!
Maytag Corporation (Strategic Alternatives) - CORRECT ANSWER-Extended
Auction ... (1) Ripplewood (bidder) reaches out to make contact (2) Maytag
engages I-bank as an advisor (3) Ripplewood submits proposal price (4) Maytag
creates special committee (non-managing directors) ... their debt rating drops ...
leading to Ripplewood dropping their offer. (5) Maytag gets a go-shop period to
find a potentially higher bidder... + termination fee for Ripplewood if Ripplewood
doesn't want to match it (6) Whirpool makes an offer, Ripplewood offers
somewhat higher but not higher than Whirlpool. (7) Maytag picks Whirlpool.
Why do international mergers occur? - CORRECT ANSWER-(1) Economic /
Technological changes -- economies of scale of combining... ex. pharma + oil &
gas, should combine bc they need to pay less to produce the same product and
will have broader market (2) Political Change -- trade barriers and how they
change... (EU - a type of deregulation) ... PRIVATIZATION (gov. transferring their
assets to the private sector)
Why is privatization often followed by merger activity? - CORRECT ANSWER-
sometimes the underlying tech change has occurred and the removal of gov.
involvement is the last deregulation action needed before the co.s can capitalize
on the gains from merging
Electric Utility Industry in the UK: - CORRECT ANSWER-(1) was nationalized in
1947 after WWII -- gov. reorganized it on regional basis so it wouldn't fail (12
regional distributors + a few national power generators) (2) Privatized in 1990s by
