The purpose of this skills course is to become familiar with Mergers and Acquisitions (M&As) from a valuation perspective.
After completing the course, you:
1.) understand how M&As can be valued using common scientifically valid valuation approaches;
2.) develop skills to apply valuation techniques to M&A related investment opportunities;
3.) be able to judge whether M&A’s add value;
4.) understand the difference between DCF valuation and real-option approach to valuation;
5.) further develop your presentation and communication skills

Mergers and acquisitions (M&As) have become key drivers of growth and transformation in the modern economy. They offer companies opportunities to expand, achieve synergies, enhance operational efficiency and more.
Despite their prevalence, M&As remain a subject of significant debate. A central question is whether these transactions genuinely create value for the firms involved. Do they lead to measurable increases in firm value and generate wealth for shareholders? While M&As often result in larger and seemingly more influential companies, their actual impact on value creation requires careful examination.
The purpose of this skills course is to become familiar with M&As from a valuation perspective. You will explore the principles of valuation in case studies focused on valuing and assessing M&A deals, identifying synergies, analyzing leveraged buyouts, and evaluating option-like deals.
Through this course, you will develop practical skills to analyze and assess the financial and strategic implications of M&As in the corporate world.

Selection from:
Berk, J. and DeMarzo, P. (2019). Corporate Finance. Global Edition. Pearson.
* Chapter 8: Fundamentals of Capital Budgeting
* Chapter 18: Capital Budgeting and Valuation with Leverage
* Chapter 19: Valuation and Financial Modeling: A Case Study
* Chapter 20: Financial Options
* Chapter 21: Option Valuation
* Chapter 28: Mergers and Acquisitions

Bruner, R. F. (2004). Applied mergers and acquisitions (Vol. 173). John Wiley & Sons.
* Chapter 10: Valuing options
* Chapters 14: Real Options and Their Impact on M&A

Alternative textbooks and chapters that are made freely available online by the authors can be valuable resources:
Welch, I. (2009) Corporate Finance: An Introduction. (Links to an external site.) New York: Prentice Hall.
* Chapter 4: A first encounter with Capital Budgeting Rules
* Chapter 12: Pitfalls in Capital Budgeting
* Chapter 13: From financial statements to economic cash flows
* Chapter 20: ProForma Financial Statements

Damodaran, A. (2002). Investment Valuation, Wiley.
* Chapter 2: Approaches to Valuation: ch2.pdf (nyu.edu) (author website)
* Chapter 5: Option pricing theory and models: ch5.pdf (nyu.edu)
* Chapter 25: acquisitions and takeovers: ch25.pdf (nyu.edu)

Damodaran, A. (2005). "The Value of Synergy", The Value of Synergy by Aswath Damodaran - SSRN

Malmendier, U. and G. Tate (2008). “Who Makes Acquisitions?” CEO Overconfidence and the Market’s Reaction”, Journal of Financial Economics. See Canvas for access details.

* Exchange students need to have taken at least one introductory finance course, sufficient first-year finance skills, passing criteria are that all three cases must be completed with a "sufficient" grading.
* An advanced level of English.