IFM12 - New York University

International Investing

Prof. Ian Giddy

New York University

International Capital Budgeting

 Strategic FDI decision vs. project appraisal

 NPV, IRR, NTV, APV

 Analyzing the cash flows:

 Tax and repatriation

 Subsidies, including low-cost finance

 Inflation and exchange rate changes

 Whose cash flow?

 Blocked funds

 Special risks & risk analysis in ICB

Copyright ©1996 Ian H. Giddy

International Investing 2

Foreign Direct Investment

 Why FDI? The theories

 Sources of competitive advantage

 Tactical choices

 export vs. foreign production

 licensing vs. FDI

 Ownership policy

 wholly-owned vs jv

 Modes of entry

 de novo vs. Acquisition



Nature of FDI

Q: Why?

A: Ownership-specific advantages of the firm

Q: How?

A: Internationalization of markets implies FDI

Q: Where?

A: Location-specific advantages of host country



Conditions for FDI

1. Expected returns exceed the next best alternative (relative return for risk)

2. Foreign investor has competitive advantage relative to host country rivals (monopolistic advantage)

3. FDI more profitable than exporting (locationspecific advantage)

4. FDI more profitable than unaffiliated foreign production

5. Special advantage of foreign investor exceeds costs and risks of owning and managing a foreign operation



FDI Theories







Economic/financial

 Expected return differential

 Currency premium

 Diversification benefits

Behavioral

 Defensive action in oligopolistic market

Monopolistic advantage

 Firm-specific advantage overcomes inherent disadvantage of operating abroad

 Product life cycle

 Internalization

 Markets vs heirarchies

 Eclectic

 Mon. Adv., Internalization & location specific advantage



A Case: Connor Vila Real

Connor Peripherals is a U.S. manufacturer of compact, resilient hard drives for laptop and desktop PC's. Connor sells drives to PC manufacturers worldwide. Because of certain incentives and low labor costs, Connor is considering shifting a substantial proportion of its production to Vila Real, Portugal.

1. What might be the advantages of locating production in Portugal?

2. What risks might Connor face?

Base your answer on FDI theory.



Connor Vila Real

A. Alternatives?

B. Advantages

 Incentives

 Lower costs of production

 Portuguese market/EU market

C. Risks

 Quality control

 On time delivery

 Customer responsiveness & interaction suffer?

 Production disruptions

 Exchange risk

 Political risk



Capital Budgeting Proposals

BOARD OF DIRECTORS

MANAGEMENT

COMMITTEE

INVESTMENT

ADVISORY

COMMITTEE

TREASURER'S

DEPARTMENT

GUIDELINES

LOCAL AFFILIATE PROJECT

PROPOSAL



International Capital Budgeting



The Capital Budgeting Decision Process



The Relevant Cash Flows



Initial



Operating



Terminal



Exchange and Political Risk Factors



Capital Budgeting Techniques



Payback



NPV



IRR



Approaches for Dealing with Risk



International Capital Budgeting And

Long-Term Investments

 Direct Foreign Investment (FDI) involves the transfer of capital, managerial, and technical assets to a foreign country

 Two additional factors must be considered:

 Exchange rate fluctuations

 Political/jurisdictional risks and barriers

 Firms can protect themselves against exchange rate fluctuations using

 debt and/or derivatives

 pricing.



Hangzhou Power Project

Key elements:







Cash flow analysis

Understanding risks and returns of the financing techniques

Valuation

INVESTORS

INTERMEDIARIES

SPONSORS



Hanel: Net Income

40000

35000

30000

25000

20000

15000

10000

5000

0

-5000

Net Revenues, 000 RMB

(Baseline assumptions)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20



The Relevant Cash Flows

 Relevant Cash Flows include:

 The incremental after-tax cash outflow

(investment) for the project

 The resulting subsequent cash inflows associated with the project

 Incremental Cash Flows are the additional cash flows directly attributable to the proposed project

 Can be expressed in host currency, then result translated into home currency



Cash Flow Components

Terminal Cash Flow

Operating Cash Flows

$25,000

$4,000 $5,000 $6,000 $7,000 $7,000 $8,000 $8,000 $8,000 $9,000 $10,000

0 1 2 3 4 5 6 7 8 9 10

Time (Years)

$50,000


Initial Investment


Finding the Initial Investment

 The initial investment

 Initial investment is determined by subtracting all cash inflows occurring at time zero from all the cash outflows occurring at time zero

 Installed cost of new asset

 Outflows to be considered include:

 Cost of the new asset

 Installation costs



Finding the Operating Cash Inflows

The income statement format for calculating operating cash inflows is:

-

Revenue

Expenses (Excluding Depreciation)

=

+

=

-

=

-

=

Profits Before Depreciation and Taxes

Depreciation

Net Profits Before Taxes

Taxes

Net Profits After Taxes

Depreciation

Operating Cash Inflows



Finding the Terminal Cash Flow

 The Terminal Cash Flow is an after-tax cash flow from the termination and liquidation of a project at the end of its expected useful life

 To lend closure to the analysis, the firm must end up where it started, i.e. without the asset.



Hanel: Cash Flow from Operations

40000

35000

30000

25000

20000

15000

10000

5000

0

Net Operating Cash Flows, 000 RMB

(Baseline assumptions)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21



Interpreting the Cash Flows: NPV

NPV =

 n

CF t i=1

(1 + k) t

- II

= Present Value of Cash Inflows - Initial

Investment



IRR is calculated by solving:

 t = 1 n CF t

(1 + IRR) t

= II

PV of Cash Inflows = Initial Investment



Adjusted Present Value in International

Capital Budgeting

APV =

- Initial costs

+ Present value of operating cash flows

+ Present value of tax shield

+ Present value of financing subsidies

What rate should be used to discount cash flows in APV?



Inflation and Devaluation

 Currency treatment of cash flows?

DOMESTIC

FOREIGN

REAL NOMINAL

 Also: Evaluate local or only repatriated cash flows?



Blocked Funds

Local cash flows

Repatriated cash flows


Projected cash flows, reinvested at local rate of return


Imperial Power Spain

1. Domestic sales volume & foreign sales volume (from price changes & elasticities)

2. X projected prices = peseta revenues

3. From units sold get variable costs

4. Other costs; taxable income; income & withholding taxes

5. Project cash flows, incl. Depr., W.C., T.V., int. after tax

6. Dollars

7. Royalties

8. U.S. Taxes

9. Discount to present at 16%

10.Discuss assumptions



Imperial Power Spain

TABLE 1 TO TAL SALES VO LU M E AN D R EVEN U E


D om estic Sales

1. U nits budgeted to be sold

2. U nit sales price (15% p.a. increase)

3. D om estic sales revenue (Ptas 000)

Export Sales

4. Pta. unit price in Spain (line 2)

5. Forecast Exchange rate, Pta./FF

6. U nit price in French francs

7. C hange in franc price over prior year

8. Less allowable 5% annual inflation

9. R elative price change over prior year1

10. R esulting volum e change (tim es -1.5)

11. Prior year sales volum e

12. Increase for 10% growth

13. Volum e before price effect

14. Tim es elasticity factor (line 10)2

15. U nits budgeted to be sold

16. Tim es unit price (in pesetas)

17. Export sales revenue (Ptas. 000)

C alculation of Sales Volum e

18. D om estic Volum e (line 1)

19. Export Volum e (line 15)

20. Total U nit Volum e

1979 1980

50000 x 1,300

65000

60000 x 1,495

89700

1300

16.67

77.98

150000 x 1,300

195000

1495

17.5

85.43

9.55%

-5.00%

4.55%

-6.82%

150000

15000

165000 x 0.9318

153747 x 1,495

229852

50000

150000

200000

60000

153747

213747


Cost Calculations

EXH IBIT 2 C O ST C ALC U LATIO N S

C alculation of per-unit cost of im ported m aterial

(N ote: 20% of Ptas. 840 = Ptas. 168

21. O riginal dollar unit cost (Ptas. 168/70)

22. Adjusted to U .S. inflation rate (tim es 1.05n)

23. Inflated dollar unit cost

24. Exchange rate (year begin)

25. Peseta unit cost of im ported m aterial

C alculation of peseta interest expense

26. D ollar interest paid (10% x $600,000)

27. Exchange rate (year end)

28. Peseta interest expense (000)

C alculation of peseta royalty expense

29. D ollar royalties paid

30. Exchange rate (year end)

31. Peseta royalty expense (000)


1979 1980

$2.40

x 1.0000

2.4

70

168

$2.40

x 1.0500

2.52

70

176.4

$60,000

70

4200

$60,000

85

5100

$30,000

70

2100

$30,000

85

2550


Pro-Forma Income Statement

TABLE 3 PR O -FO R M A IN C O M E STATEM EN TS (Pta 000)

1979

R evenue from Sales

32. D om estic sales revenue (line 3)

33. Export sales revenue (line 17)

34. Total revenue

Expenses

35. Im port m aterial/unit (line 25)

36. D om estic m aterial/unit (840)(0.4)(1.15)n

37. Labor/unit (840)(0.4)(1.15)n

38. Total unit variable costs

39. Tim es unit sales volum e (line 20)

40. Total variable costs (Ptas 000)

41. M anufacturing overhead (x 1.15n)

42. D epreciation (10% of cost)

43. Interest (line 28)

44. R oyalties (line 31)

45. Total expenses

Profit & D ividend C alculation

46. N et incom e before tax

47. Less 30% incom e tax

48. N et incom e after tax

49. Less 10% dividend tax

50. D ividend paid to IPC (U S)

D ollar equivalents on above

51. Year-end exchange rate

52. N et incom e before incom e tax ($)

53. Incom e & D ividend taxes paid

54. D ividend paid to IPC (U S)

1980

65000

195000

260000

89700

229852

319552

168

336

336

840

176.4

386.4

386.4

949.2

x 200,000 x 213,747

168000

75000

7000

4200

2100

256300

202889

86250

7000

5100

2550

303789

3700

1110

2590

259

2331

70

52857

19557

33300

15763

4729

11034

1103

9931

85

185447

68612

116835



Project Cash Flow Analysis

TABLE 4 PR O JEC T C ASH FLO W S (Pta 000)

1978 1979

C ash Inflows

55. N et incom e after tax (line 48)

56. D epreciation (line 42)

57. Interest after tax (line 28 x 0.7)

58. R ecapture of working capital3

59. N et term inal value4

60. Total cash inflow

C ash O utflows

61. N et working capital

62. Equipm ent

63. Total outflows

C ash Flow Analysis

64. N et cash flows

65. 16% present value factor

66. Present value of each cash flow

67. C um ulative net present value

68. Approxim ate internal rate

of return = 46%

1980

--

--

--

--

--

77000 --

70000 --

147000 --

2590

7000

2940

--

--

12530

11034

7000

3570

--

--

21604

--

--

--

-147000

1

-147000

-147000

12530

0.8621

10802

-136198

21604

0.7432

16056

-120142



Parent Cash Flow Analysis

TABLE 5 PAR EN T C ASH FLO W AN ALYSIS (U S$)

1978

C ash Inflows

69. D ividends from IPC -Spain (line 54)

70. R oyalty receipts from IPC -Spain (line 29)

71. N et term inal value5

72. Total cash inflow

C ash O utflows

73. Parent equity investm ent

74. Pre-tax incom e, IPC -Spain (line 52)

75. U .S. taxes at 50%

76. Less credit for Spanish taxes (line 53)

77. U .S. taxes payable on dividend incom e

78. U .S. taxes payable on royalty incom e

79. Total outflow

C ash Flow Analysis

80. N et cash flow

81. 16% value factor

82. Present value of each cash flow

83. C um ulative net present value

84. Approx. internal rate of return =27%

1979 1980

--

--

--

--

33300

30000

--

63300

116835

30000

--

146835

--

--

--

--

--

1500000 --

1500000

52857

26428

19557

6871

15000

21871

--

185447

92723

68612

24111

15000

39111

-1500000

1

-1500000

41429

0.8621

35716

107724

0.7432

80060

-1500000 -1464284 -1384224



Adjusting for Risk

 Scenario, sensitivity and simulation

 Certainty equivalent

 Adjusting the discount rate

 Risk and the CAPM



Sensitivity and

Scenario Analysis

An approach that attempts to capture the variability of cash inflows and NPV's

Sensitivity Analysis uses a number of possible values for a given variable to assess its impact on return, as measured by NPV

Scenario Analysis is similar to sensitivity analysis but allows for simultaneous changes in a number of variables



Simulation

 Simulation is a statistically-based approach using probability distributions and random numbers to estimate risky outcomes

 Use computer to simulate virtually every inflow and outflow variable and determine the resulting

NPV's

 After a thousand or so simulations the decision maker has a good idea of not only the expected value of the return on a project, but also the dispersion: the probability of achieving a given return.



Risk Adjustment Techniques

Certainty Equivalents (CE's) adjust cash inflows to determine the percentage of estimated inflows that investors would be satisfied to receive for certain in exchange for those that are possible each year

 t

CF t

NPV when CE's are used is calculated as n

 t x CF t

:

NPV =



= - I I

(1 + R

F

) t t =1

= Certainty Equivalent factor in year t (0 <

 t

< 1)

= Relevant cash inflow in year t

R

F

= Risk-free rate of return



Risk-Adjustment Techniques

Risk-Adjusted Discount Rates (RADR's) adjust for risk by changing the discount rate -- raising it for higher risk and lowering it for lower risk

RADR's are calculated as

NPV =

 n

(1 + RADR) t t =1

CF t

- II

 The use of RADRs is closely linked to the capital asset pricing model (CAPM)



RADR and CAPM

Recall that total risk = nondiversifiable risk + diversifiable risk

Beta is a measure of nondiversifiable risk and k j

= R

F

+

 j

(k m

-R

F

) (CAPM)

If we assume that real corporate assets are traded in efficient markets, CAPM can be modified as follows: k

Project j

= R

F

+

 j Project

(k m

-R

F

) where:

 j Project is the relationship between the project's expected return and the market's expected return



RADR and CAPM k k m

R

F

Accept

0


1.0

Beta

Reject

SML


Portfolio Effects

 The value of the firm is generally not affected by diversification

 The market for real corporate assets is inefficient, therefore total risk is most relevant



Risk-Adjusted Investment Cutoff Rates

COUNTRY

ARGENTINA

AUSTRALIA

BELGIUM

BRAZIL

CANADA

FRANCE

GERMANY

GREECE

INDIA

INDONESIA

ITALY

JAPAN

MALAYSIA

MEXICO

14

14

12

17

10

17

20

17

14

10

12

CUTOFF RATE

17%

10

10

COUNTRY CUTOFF RATE

NETHERLANDS 10

NEW ZEALAND 10

NIGERIA 20

PHILIPPINES

PORTUGAL

PUERTO RICO

17

14

12

SINGAPORE 12

SOUTH AFRICA 12

SOUTH KOREA 20

SPAIN 14

TAIWAN

THAILAND

17

20

UNITED KINGDOM 12

UNITED STATES 10

VENEZUELA 17



Government Subsidized Financing i = normal cost of debt i* = subsidized cost

 Then subsidy equals F(i-i*), where f is the amount of debt subsidized.

 A. Adjusting project's cost of capital

 B. Adjusting project net cash flows

Which is correct? Depends on reinvestment assumption .



Financing Decisions



Capital Structure



Firm Financing Needs



Short Term Debt



Long Term Debt



Equity



Hybrid Securities



Financing Choices

DEBT

SHORT

TERM

BANK LOANS

REVOLVERS,

EUROCREDITS

COMMERCIAL

PAPER

TERM LOANS

THE

FIRM

LONG

TERM

EQUITY COMMON

HYBRIDS

LEASING

PREFERRED STOCK


CONVERTS RIGHTS WARRANTS


Bond Credit Risk

Moody’s

Aaa

Aa

A

Baa

Ba

B

Caa

Ca

C

Standard &

Poor’s

AAA

AA

A

BBB

BB

B

CCC

CC

C

D


Interpretation

High-quality debt instruments

Strong to adequate ability to pay principal and interest

Ability to pay interest and principal speculative

In default


Valuation of Common Stock

 Book Value Per Share

 Liquidation Value Per Share

 Price/Earnings (P/E) Multiples

 Capital Asset Pricing Model (expected return and nondiversifiable risk)

 Risk-Adjusted Net Present Value



Financing Choices

DEBT

SHORT

TERM

BANK LOANS

REVOLVERS,

EUROCREDITS

COMMERCIAL

PAPER

TERM LOANS

THE

FIRM

LONG

TERM

EQUITY COMMON

HYBRIDS

LEASING

PREFERRED STOCK


CONVERTS RIGHTS WARRANTS


Mergers and Acquisitions



Mergers



Acquisitions



Divestitures

Concept: Is a division or firm worth more within the company, or outside it?



Corporate Finance

CORPORATE FINANCE

DECISONS

INVESTMENT

PORTFOLIO

CAPITAL

M&A

FINANCING

DEBT EQUITY

RISK MGT

MEASUREMENT

TOOLS



The Market for Corporate Control













M&A&D situations often arise from conflicts:

Owner vs manager ("agency problems"

Build vs buy ("internalization")

Agency problems arise when owners' interests and managers' interests diverge. Resolving agency problems requires

 Monitoring & intervention, or

 Setting incentives, or

 Constraining, as in bond covenants

Resolving principal-agent conflicts is costly

Hence market price may differ from potential value of a corporation



“Internalization”: Is an activity best done within the company, or outside it?

Issue: why are certain economic activities conducted within firms rather than between firms?

 As a rule, it is more costly to build than to buy — markets make better decisions than bureaucrats

 Hence there must be some good reason, some synergy, that makes an activity better if done within a firm

 Eg: the production of proprietary information

 Often, these synergies are illusory



Goals of Acquisitions

Rationale: Firm A should merge with Firm B if

[Value of AB > Value of A + Value of B + Cost of transaction]

 Synergy

 Gain market power

 Discipline

 Taxes

 Financing



Do Acquisitions Benefit Shareholders?

Successful Bids

Technique Target Bidders

Tender offer

Merger

Proxy contest

30%

20%

8%

4%

0 na

 Note: Abnormal price changes are price changes adjusted to eliminate the effects of marketwide price changes



Do Acquisitions Benefit Shareholders?

Unsuccessful Bids

Technique Target Bidders

Tender offer

Merger

Proxy contest

-3%

-3%

8%

-1%

-5% na



Goal of Acquisitions and Mergers



Increase size - easy!



Increase market value - much harder!



Fallacies of Acquisitions

 Size (shareholders would rather have their money back, eg Credit Lyonnais)

 Downstream/upstream integration

(internal transfer at nonmarket prices, eg

Dow/Conoco, Aramco/Texaco)

 Diversification into unrelated industries

(Kodak/Sterling Drug)



Success Rates For Cross-Border

Mergers And Acquisitions

100%=28

Success

43%

Failure

57%



Success Rates For Cross-Border

Alliances

100%=45

Undecided

18%

Success

55%

Failure

27%



What's It Worth?

Valuation Methods

 Book value approach

 Market value approach

 Ratios (like P/E ratio)

 Break-up value

 Cash flow value



How Much Should We Pay?

Applying the discounted cash flow approach, we need to know:

1.The incremental cash flows to be generated from the acquisition, adjusted for debt servicing and taxes

2.The rate at which to discount the cash flows (required rate of return)

3.The deadweight costs of making the acquisition (investment banks' fees, etc)



Framework for evaluating the value of an Acquisition

Standalone value of acquirer

(premerger)

Standalone value of target

(without any takeover premium)

Value of

Synergies

Transaction

Costs

Combined

Value

Value of acquirer if it does not acquire target

Value of target to acquirer

Price paid including premium

Net value gained from acquisition

Adapted from: W. Pursche, “Building Better Bids: Synergies and Acquisition \prices”, Chief Financial Officcer USA (1988):63-64



Framework For Assessing

Restructuring Opportunities

Current perceptions gap

Current

Market

Value

1

Maximum restructuring opportunity

Company value as is

2 5

Optimal restructured value

Strategic and operating opportunities

Restructuring

Framework

Financial engineering opportunities

3

Potential value with internal improvements

Disposal/

Acquisition opportunities

4

Potential value with internal and external improvements



$ 975

$ 350

Using The Restructuring Framework

$ Millions of Value

$1,000

$ 25

Current

Market

Value

$ 725

Current perceptions gap

1

Maximum restructuring opportunity

Company value as is

2

Strategic and operating opportunities

3

Potential value with internal improvements

$ 1,325

Restructuring

Framework

Disposal/

Acquisition opportunities

$ 300

5

Optimal restructured value

$ 1,725

Financial engineering opportunities

$ 100

4

Increase D/E

Potential value with internal and external improvements

$ 1,625



The Cost of Capital

Required rate of return on equity, R

E

, may be computed from the Capital Asset

Pricing Model (CAPM):

R

E

= R

F

+ Beta (R

M where R

F

= risk-free rate

- R

F

)

Beta= nondiversifiable risk factor, and

R

M

= return on the market.

In short, the discount factor should reflect the riskiness of the acquisition.



Application





Fakawi Navigation plans to acquire Feng-Shui

Compass Co. This would result in $25 million of incremental operating revenues in each of the first 5 years, and in $15 million of additional debt servicing costs per annum, as well as $5 million in tax shields.

Fakawi expects to divest the target in year 6 for $100 million. The Treasury note rate is 6%, and the S&P return is 16%. Fakawi's advisors estimate that Feng-

Shui has a beta of 1.3. For this advice they are charging 2% of the acquisition price.

What is the maximum price that Fakawi should offer for

Feng-Shui?



Reasons Why Many Acquisitions Fail

To Generate Value


Value

Destruction

Deal price not based on cash flow value




Over optimistic market assessments

Value

Destruction






Overestimating synergies


Value

Destruction






Overestimating synergies


Value

Destruction

Poor post-merger integration




Typical Losing Pattern For Mergers









Candidates are screened on basis of industry and company growth and returns

One or two candidates are rejected on basis of objective DCF analysis

Frustration sets in; pressures build to do a deal; DCF analysis is tainted by unrealistic expectations of synergies

Deal is consummated at large premium





Postacquisition experience reveals expected synergies are illusory

Company’s returns are reduced and stock price falls



Divestitures

Divestiture: the sale of a segment of a company to a third party









Spin-offs —a pro-rata distribution by a company of all its shares in a subsidiary to all its own shareholders

Equity carve-outs —some of a subsidiary' shares are offered for sale to the general public

Split-offs —some, but not all, parent-company shareholders receive the subsidiary's shares in return for which they must relinquish their shares in the parent company

Split-ups —all of the parent company's subsidiaries are spun off and the parent company ceases to exist.



Divestitures Add Value

 Shareholders of the selling firm seem to gain, depending on the fraction sold:

 Total value created by divestititures between 1981 and 1986 = $27.6 billion.

% of the firm sold Announcement effect

0-10%

10-50%

50%+

0

+2.5%

+8%



Strategic Alliances:

An Alternative to Acquisition







"A strategic alliance is a collaborative agreement between two or more companies, which contribute resources to a common endeavor of potentially important competitive consequences, while maintaining their individuality."

Example with internal emphasis: Sunkyong with GTE,

Vodaphone & Hutchinson Whampoa for cellular system

Example with external emphasis: Santander with

Royal Bank of Scotland for European market in financial services

 Driving forces:

 Complementary resources - gain strategic resources




Similar capabilities - gain economies or market power


Forms of Strategic Alliance

 Many linkages are options for future development of relationships

POTENTIAL

FOR CONTROL


ACQUISITION MERGER

WITH FULL

INTEGRATION

JOINT

VENTURE

INFORMAL

ALLIANCE

JOINT

PROJECTS

SPECIFIC

DISTRIBUTION

OR SUPPLY

AGREEMENT

IRREVERSIBILITY OF COMMITMENT


Pitfalls and Problems

 Linkage may not offer access to partner's resources (JP Morgan-Espirito Santo)

 Disagreement on contribution (Euroclear-Cedel)

 Partners competing in one another's market

(Credit Lyonnias-Commerzbank)

 Linkage may exclude other options for expansion into a product or market

 Clash of cultures; cross-purpose marketing (Credit

Suisse-First Boston)

Key predictor of stability is asset specificity and irreversibility of commitment.



Geographic Overlap Helps Mergers

And Acquisitions...

6

Failure for acquirer

92

94

Success for acquirer

8

Minimal geographic overlap (sample of 12)


Moderate or high geographic overlap (sample of 16)


...But It Hinders Alliances

Failure for both partners

Mixed

Results

24

14

Success for both partners

62


Minimal geographic overlap

(sample of 37)

37

38

25

Moderate or high geographic overlap


Mergers and Acquisitions: Summary



Mergers & Acquisitions



Divestitures



Strategic Alliances

Concept: Is a business worth more within our company, or outside it?



IFM12 - New York University

Mergers

Acquisitions

Divestitures

Concept: Is a division or firm worth more within the company, or outside it?

Increase size - easy!

Increase market value - much harder!

Mergers & Acquisitions

Divestitures

Strategic Alliances

Concept: Is a business worth more within our company, or outside it?

Related documents

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Support

IFM12 - New York University

Mergers

Acquisitions

Divestitures

Concept: Is a division or firm worth more within the company, or outside it?

Increase size - easy!

Increase market value - much harder!

Mergers & Acquisitions

Divestitures

Strategic Alliances

Concept: Is a business worth more within our company, or outside it?

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