Overview

The modern business environment is evolving ever more rapidly forcing companies to continuously adapt their business model, or to face obsolescence. Technological progress and the changes it has brought such as globalization, the high-tech sector and the information economy are driving this need to constantly rethink corporate strategy and financial structure. This version of Corporate Valuation and Financial Strategy focuses on financial foundations for companies in need of a strategic overhaul to adapt to new realities. Given a change in their economic environment, we will discuss appropriate financial strategies that enable companies to implement deep corporate changes, such as M&A transactions (be it as targets or acquirers), divestitures, and restructurings.

Taught from a life-cycle of the firm perspective, we will focus on young and obsolete companies as targets, and growing and mature ones as acquirers. To lay the foundations for a discussion of the financial challenges facing companies from inception to demise, the course will devote a significant amount of time to develop the requisite valuation tools. Hence, the course places particular emphasis throughout on two guiding themes: valuation and the interaction of corporate (re)organization and financial strategy. Topics include: real options, network economics, mergers and acquisitions, divestitures, and restructuring.

Objectives

This course develops financial valuation and financial strategy concepts for firms ready to meet the challenges of mergers, acquisitions, and related transactions. Its central theme are valuation, M&A transactions, strategic bidding, and financial restructuring. In addition to M&A transactions, students should expect to become familiar with

  1. real options as a financial valuation and, indeed, management tool;

  2. valuation in the context of M&A transactions and corporate restructuring;

  3. bidding and other strategic behavior in acquisitions and asset disposals;

  4. the interaction of corporate form and financial strategy;

  5. assessing the success of value enhancing corporate and financial restructuring techniques by event study methodology.