Mergers, Acquisitions and
Alliances
Course Coordinator:
Phanish Puranam
Course Objectives
The primary aim of this course is to help prepare managers plan and execute
corporate development strategies- M&A and Alliances. The course is particularly
useful for those intending to become strategy consultants or investment bankers as
well as those who plan to work in, and eventually lead, corporate development
functions within firms. It builds on many concepts covered in the core Strategy I
course and links to other courses such Strategy –II, as well as those in Finance and
Organizational Behaviour.
Learning Methods
The format of the course is like a seminar rather than a regular class, with several
speakers – both academics and managers - brought in for their specific expertise in
particular areas, and with Phanish Puranam coordinating and integrating the content.
Sessions will feature articles, cases, lectures, and videos.
Course materials
1. There is NO prescribed textbook. Readings and cases for the course are
provided in course-pack. You can find several supplementary pieces of
research on my websites http://faculty.london.edu/ppuranam, as well as
http://ssrn.com/author=370849
2. Electronic copies of slides are posted on Portal AFTER each class. I have
experimented with different approaches, and I find that I deliver the best
learning experience by providing the slides after, not before class.
Assessment and Assignment Details
This is primarily a case discussion based course -attendance is important not only
For yourself, but in enriching the experience of your colleagues. This is reflected in
the 30% weight given to class participation. This is also a “content rich” course, in
the sense that the evaluation also depends on your demonstration of mastery over a
set of concepts and ideas through your individual end-course exam (40%). Finally, I
am also interested in your being able to apply these concepts to think about
situations in a collaborative way- hence the group project (30%). Details follow:
1.
2.
3.
Class participation (30%). Participation will be judged more on quality than
quantity, but failure to participate actively will be marked down. If you feel you
are having problems participating, due to shyness, language or other issues,
PLEASE CONTACT ME as soon as possible, and I will try to ensure you have
adequate opportunity to contribute more fully. Contributions that are pointless
or time wasting will be scored down, but questions based on a genuine desire
for clarification will always be treated positively.
Individual exam (40%). This should be completed individually. The exam will
be up on Portal after the last class. It will be an open book exam with a short
case and questions. The exam is due electronically to
swilson@london.edu.
Group assignment (30%). A group assignment will be outlined during the
first day- it is designed to be completed by the last day of class. Groups
should not normally be more than four students. Group rooms will be
available for you to work together every day in the evening on the project, and
I will be available to answer questions, provide suggestions etc. You will
present the group project on the last day of class and email in a 2 page
write up to swilson@london.edu
Day 1: Strategic Logics for Acquisitions and
Alliances
09.00 – 17.00
___________________________________________________________________
Morning Session
Readings:
1) “Not All M&As Are Alike - and That Matters,” J. Bower, Harvard Business Review,
2001
2) “Choosing equity stakes in technology sourcing relationships”, California
Management Review, P. Kale and Puranam, P, 2004
3) “How acquisitions can revitalize companies”, Vermeulen, F. Sloan Management
Review, 2005
Preparation Questions:
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Why do firms engage in M&A and alliances?
Why do they fail so often? Why are they so popular despite this?
Afternoon Session
Case:
Microsoft and Sendit (A): Strategic Partners? INSEAD, 2003
Preparation Questions
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Why is Sendit attractive for Microsoft?
What would be the most suitable structure for a possible relationship between
Microsoft and Sendit?
If you were Mark Ledsome, how would you present the Sendit opportunity to
Bob Muglia, VP of Microsoft’s .net initiative (your boss)? Please come to class
with a summary slide (TP) of your recommendation and the rationale.
Day 2: Acquisitions
09.00 – 17.00
___________________________________________________________________
Morning Session
Case:
Microsoft’s Acquisition of Sendit (B): The Valuation Dilemma, INSEAD, 2003
Preparation Questions:
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How much is Sendit worth on a standalone basis? How much should it be
worth to Microsoft?
Put yourself in Ledsome (Microsoft)’s position: how would you approach this
negotiation with Sendit? What would be your priorities and your action plan?
Now, take Hjalmar (Sendit)’s position: what would you do to maximize value
to your shareholders? To your employees?
Afternoon Session
Readings:
1)
Jennifer Chatman & Sandra Cha. Leading by Leveraging Culture, Harvard
Business Review, 2003.
Preparation Questions:
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
Case:
Chatman and Cha discuss several tools that can be used to build a culture.
How could these tools be used in the case of a merger?
What else would you do to integrate cultures in a merger or partnership?
Wells Fargo and Norwest: “Merger of Equals” (A) Stanford Graduate School
of Business, 2004.
Preparation Questions:
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
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What are the expected benefits of bringing these two banks together? What
are the obstacles to realizing this potential?
Describe the culture of each of these companies. How are they equals? In
what way do the cultures of the two companies differ?
If you were Kovacevich, what actions would you take to realize that potential?
Be specific.
Day 3: Collaborative Strategies
09.00 – 17.00
___________________________________________________________________
Morning Session
Case:
Microsoft’s Acquisition of Sendit (C): The Integration Challenge, INSEAD,
2003
Preparation Questions:
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What are the key issues to handle in order to create the expected value in this
deal? How would you prioritize them?
What would be your recommended approach to the post-acquisition phase in
each of the relevant functional areas, based on the prior class discussions
and the information provided in the C case?
What kind of time-frames would you suggest they should maintain as they go
about implementing the plan?
What kind of initiatives would you recommend in order to ensure a successful
implementation of the plan? Please come to class with a one-slide summary
of your recommendations (TP).
Afternoon Session
Case:
Intel capital - The Berkeley Networks Investment – Structuring a partnership
Preparation Questions:
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What does Intel hope to get from relationships like the one with BN? What is
BN getting?
Have they each got what they wanted from this alliance?
How should Intel respond to the anonymous acquisition offer for BN?
Day 4: Managing Alliances
09.00 – 17.00
___________________________________________________________________
Morning Session
Negotiating an alliance (Cases to be handed out in class)
Afternoon Session
Case:
Xerox: Outsourcing the global information technology resources
Preparation Questions
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Why did Xerox want to outsource its IT services to EDS? Why would EDS
take on this work?
Why did Xerox-EDS want to set up this relationship as an alliance instead of a
typical supplier relationship?
What are the steps they took to structure this partnership? How robust do you
think they will be?
Day 5: Corporate development capabilities
09.00 – 17.00
___________________________________________________________________
Morning Session
Readings:
1) “Learning to integrate”, Maurizio Zollo, 2000, Financial Times-Mastering Strategy.
2)
”Two grandmasters at the Extreme, The Alliance Analyst, 1996
3) “Bringing some Discipline to M&A mania, Puranam P, Singh H and Zollo, M,
Financial Times Mastering Management
Preparation Questions


What makes some companies better than others at managing alliances and
acquisitions?
If you are asked to head up the Corporate development (M&A and Alliances)
function at your company, what steps would you take to build the capabilities
for this function? Bring a single slide (TP) to class with your thoughts.
Afternoon Session
Group Project Presentations & Course Wrap-up