Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln CONTENT TABLE OF CONTENT………………………………………………………….1 1.1 INTRODUCTION…………………………………………………………....2 1.2 STATEMENT OF THE PROBLEM…………………………………….....2 1.3 LITERATURE REVIEW…………………………………………………….3 1.4 DEFINITIONS OF MERGERS AND TAKEOVERS……………………..3 1.5 TYPES OF MERGERS……………………………………………………..4 1.6 METHODS OF FINANCING; THEIR ADVANTAGES AND DISADVANTAGES……………………………………………………………...5 1.7 MOTIVES BEHIND MERGERS…………………………………………...6 1.8 MAJOR THEORIES OF MERGERS AND EVENTS……………………6 I. Synergy…………………………………………………………………………..6 II. Increase Market Share…………………………………………………………8 III. Economies of Scales…………………………………………………………...8 IV. Revenue enhancement through entry into new markets and industries…10 V. Risk diversification or moderation…………………………………………....10 VI. Tax Advantages………………………………………………………………..11 VII. Internalisation of transactions………………………………………………...11 VIII. Talent, knowledge and techniques to enhance revenue…………………..11 IX. Bargain buying…………………………………………………………………12 X. Inefficient management and Re-engineering……………………………….12 XI. Managerial motive……………………………………………………………..12 XII. Free Cash flow, Survival and Empire building……………………………...13 XIII. Hubris……………………………………………………………………………13 XIV. Third party motives…………………………………………………………….14 1.9 WHO BENEFITS IN MERGERS…………………………………………14 2. CONCLUSION………………………………………………………………14 REFERENCES………………………………………………………………...15 Maxine O. Asiedu 1 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln Mergers and takeovers 1.1 Introduction Mergers and takeovers have been in the system for a very long time but their rate has been on the increase in recent time resulting in numerous regulatory changes. In today’s world, mergers are taking place even in unrelated businesses and organizations such as the pharmaceutical, banking, financial and communication industries. These organizations normally merge by outright purchase using cash, stocks or a combination or through pooling of resources or merger of equals (Arnold, 1998). The compelling factor behind this is said to be both regulatory and business environmental (Spiegal and Gert, 1996). The theories behind mergers and takeovers are basically derived from economic and management theories and are analyzed using tools of finance. Some of these theories are synergy, increase market share, economies of scale, revenue enhancement, new business opportunities, Hubris, geographic diversification, inefficient management etc. 1.2 Statement of the problem The increasing trend in mergers and takeovers has impacted on the bidding price. There has been a record of huge premium prices for M&A’s and that raises the question as to why such bidding premiums? The argument has mainly been based on its synestical effects as (Arnold, 1998) puts it. However many writers and analysts have questioned whether there are other reasons for the overestimation in potential synergies. This essay therefore seeks to analyze the theories of mergers and takeovers or acquisitions (M&A) and relate it to some events and how those events were perceived by investors and commentators. Maxine O. Asiedu 2 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln 1.3 Literature Review Mergers and Takovers as mentioned earlier have been increasing significantly and the considered value has been a controversial issue. Whilst some researches have argued that M&A creates value through economies of scale (Baumol 1982; Ross 1980) others have argued that these transactions are forged by managers who are either self-serving (Fower and Schmidt 1990) or overconfident (Arnold, 1998; Hayward and Hambrick 1997) and it often results in loss of vale for the acquirers. Despite this controversy, M&A continues to be an important way by which wealth can be maximised. In order to account for the view s of investors and commentators the presentation that follows will be in the following stages: (a) definition of M&A and the types; (b) motives behind mergers and (c) theories of M&A and related events. 1.4 Definitions of mergers and takeovers. Glen (1998) defines merger as the combining of two business entities under common ownership. Hill and Grant (2007) defines acquisition as when a company uses it capital resources such stock, debt, or cash to purchase another company but also emphasized that cash is the most common method of payment except that at the peak of the cycles shares are the most popular form of consideration. Lubatkin and Shrieves (1986, p.497) had these to say on mergers and acquisitions they "are used interchangeably to mean any transition that forms one economic unit from two or more previous ones" They also described a merger as an agreement between equals to pool their operations and create a new entity. Undoubtedly there have been a continues increases in mergers and takeovers over the years and in the most recent wave which peaked in 2000, US firms spent about 1.6 trillion on 11,000 mergers and acquisitions up from $300 billion in 1991 (Hill and Grant, 2007). UK has also had a merger wave in which it peaked in early 1970s late 80s and 90s. In 2000 for example it recorded 106,916 million M&A (Financial Statistics Maxine O. Asiedu 3 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln UK, 2000). There are basically three types of mergers and they will be discussed in the following paragraphs. 1.5 Types of Mergers In general mergers have been classified into three categories namely: horizontal, vertical, or conglomerate. Horizontal merger takes place between two firms in the same line of business. In a horizontal merger two companies which are engaged in same line or similar lines of activity are combined. Recent examples include the merger of Royal Bank of Scotland and Nat West, Morrison and Safeway, Glaxo Wellcome with Smithkline Beecham, also BP with Amoco Arco and Boeing with McDonald Douglas etc. Vertical merger occurs when firms from different stages of production amalgamate with the belief that some amount of competition is necessary since it ensures customer value (Arnold, 1998). There are downstream or backward vertical merger and upstream or forward vertical merge. A vertical merger entails expanding forward or backward in the chain of distribution, toward the source of raw materials or toward the ultimate consumer. For example, an auto parts manufacturer might purchase a retail auto parts store. Conglomerate merger is formed through the combination of unrelated businesses or can be described as the combining of two firms which operates in unrelated business areas. Example, in 1996 Tomkins bought The gates Corporation (a manufacturer of power transmission belts, wellington boots and carpet underlay) for US$ 1,160m and added it to Hovis Bread and the others (Arnold, 1998) Maxine O. Asiedu 4 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln 1.6 Methods of Financing, their Advantages and Disadvantages There are three main options in which mergers are financed and they are the use of cash, shares and the third option involves the use of debentures, loan stock, convertibles and preference shares. Cash is the most preferred means of payment especially where the market is unstable and allows shareholders to spread their investment through purchase of wide-ranging portfolio. Mixed bids are also allowed and that is where a variety of financial securities are used. The advantage of using cash is that the acquirer’s shareholders maintain the same level of control over their company. The new shareholders will not take ownership or possession of the right of other shareholders. Shares are also used to finance mergers and they have two primary advantages. The capital gains tax can be deferred as the investment gain is not yet realised and also there is an interest in the combined entity. There is no immediate outflow of cash and does not put pressure on cash flow in the short run. Secondly the price earning per ratio game can be played. This is where companies increase their shares (EPS) by acquiring firms with lower PER’s than theirs. This can bring a rise in share price without any economic value is created. The third payment option includes alternative forms of consideration like debentures, loan stock, convertibles and preferred shares. These are unpopular because of the difficulty in establishing a rate of return on their securities making it be attractive to target shareholders. Writers have acknowledged the problem of marketability of securities and voting rights over the newly merged company. 1.7 Motives behind Mergers Maxine O. Asiedu 5 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln The motive behind horizontal mergers is to achieve economies of scale, the enhancement of market power resulting from reduction in competition etc. This type of merger mostly tends to attract the attention of government competition agencies such as Office of Fair Trading and The Competition Commission in the United Kingdom. These vertical types of merger is also said to increase certainty of supply of market outlay, reduces costs of search, contracting, advertising co-ordination of production. The advantage with this kind of merger is certainly risk reduction through diversification, opportunity cost and improved efficiency. 1.8 Major theories of mergers in relation to events The theories behind M&A are numerous but for the purpose of this essay I will adopt major theories given by researchers. The major theories that will be discussed here are: Synergy, increase market share, economies of scale, revenue enhancement, new business opportunities, Hubris, geographic diversification, inefficient management etc. i. Synergy The buzzword synergy has mostly been used as the reason for continues rise in M&A, that is the idea that a combined entity will have a value greater than the sum of its parts, or greater value. Theoretically, a company will enter into an acquisition or merger agreement if they believe that the Net Present Value (NPV) of company A and company B is greater than NPV of company A and NPV of company B. In a more simplified term, the economic value of these firms combined is greater than the economic value of these two firms as separate entities. Maxine O. Asiedu 6 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln This is expressed mathematically as 2+2= 5 (Lubatkin and Shrieves, 1986, p.497) or PVab = PVa + PVb + gains (Arnold, 1998). Its characteristics and resulting values before and after formation have been studied thoroughly in the financial literature (see for instance, Jensen and Ruback, 1983) and accounted that modern financial theory of M&A occur in the hope of positive synergistical effects, and many managers have cited synergy arguments in order to justify their actions and so have many researchers proved this assertion. This was confirmed by a number of writers (see Friedman and Gibson, 1988; Maremont and Mitchell, 1988; Porter, 1985). Reasons for these synergistrical effects have been offered as gaining fast access to new technologies or new markets, tapping into sources of know how located outside the boundaries of the firm, benefiting from economies of scale in research and/or production, and finally monopoly type advantages. But looking at the successes of M&A from the past three decades confirms otherwise. If 2+2=5 then have many M&A events failed. There have been failures in which some resulted in break up of the financial marriages. The acquisition of between Brooks Brothers by Marks and Spencer, Kellogg’s and Lender's Bagels, 1990 and even well documented mergers like AOL and Time Warner 2001, AT&T and NCR 1991, Quaker Oats and Snapple all turned out to be failures. The chance of value in synergy only holds if all things are equal. As much as there are successes in M&A there are failures but the latter is out number the former significantly. A recent acquisition of Brooks Brothers, US by Marks & Spencer went disastrous and investors had to pool back. It was reported the clothing retail shop was recording huge losses after having paid a premium price of $750m (Management Decision Journal, 1994) updating the technology and stocking with variety of stock was still under performing. They had to pull back eventually and this was what the chairman Lord Raynar admitted they over paid the bid price (Arnold, 2005). M&S was said to have traded in an autocratic style (ibid) though management was cautioned that the bid price was too high. M&S’s case is just on out of hundreds of failed M&A. According a survey by KPMG, the value of M&A deals in US declined by 48%, while European 60% and Asia-Pacific region 10% (International financial law review, 2001). Maxine O. Asiedu 7 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln Also between 1996 and 1998 a similar report by KPMG which indication a poor performance of cross-border mergers and even tried to retrieve it for fear of its receiving publicity (Arnold, 2005). This reports cast doubts to the effectiveness of M&A. So the question is if shareholders wealth are not increasing through these consolidation the why the continuous increase? This some then confirm some issues raised by theorist. ii. Increase Market Share Another theory behind M&A is that it increases market shares. Businesses over the world are interested in increasing their operational efficiencies and monopolistic influence since it will help them gain market power. Therefore firms of different sizes and from different area are constantly merging. Whilst larger firms are acquiring smaller firms, there are some smaller ones acquiring larger ones (Malatesa and walker 1998; Duggal and Millar 1994). This consolidation will give the acquiring firm the ability to exercise some control over the price of a product and this can be achieved through monopoly or collusion. But unfortunately there have been few cases of success though research has indicated that same industry mergers are less risky and more likely to gain market power (Arnold, 2005). Examples of same industry mergers are Travelers/Citicorp and HewlettPackard/Compaq, they have recorded enormous growth since they exercised patience and negotiated over a long period of time and hence allowed all the parties to develop realistic expectations. Unpredictably both mergers exceeded their basic goals despite doubts. Consolidation increases market power for companies but is it mostly helpful for consumers? Monopoly can be treacherous to consumers. iii. Economies of Scales: The theory of economies of scale has been used to justify M&A. Efficiency theory purports that there are operating, financial and management synergies involved in merging or takeovers and this will be advantageous to acquirers since larger size of Maxine O. Asiedu 8 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln production often leads to lower per unit cost of output. There can be economies in marketing which arise through the use of common distribution channels, administration, research and development etc. Also development of executives and managers is mostly better in large firms since there is normally structured form of training programmes and easy access to wider knowledgeable and experienced colleagues. In February 2005, EPIC acquired the Siemens Electronics Manufacturing Center operations in Johnson City in the US known as "JoCy." And is turn out to be successful since they accepted differences and were opened to themselves. Researchers have raised questions as to whether friendly bids have positive returns than hostile bids? The post acquisition business culture should be unifying and so many issues must be address to ensure success. There have been few success stories like of EPIC and has been confirmed that achieving cost reductions post synergy is easier than revenue increase(Glen, 2005). Various surveys of academic research, interviews and financial firms have revealed that it is much easier to achieve success when the stated goal of a merger is its potential for cost reduction rather than its potential to increase revenue. For example Kellogg's had a disastrous acquisition of Lender's it fared much better in the acquisition of the frozen vegetarian burgers unit of Worthington Foods because they focused on the cost side of the synergy rather than growth. Likewise, the Hewlett-Packard/Compaq merger was largely predicated on a consolidation of capacity that could be accurately measured. HP had established an objective of achieving $1.3 billion in cost savings by November 2003. Yet within a year, according to Forrester Research, HP had posted savings of $3.7 billion, and acquired new strength in servers and IT services. In M&A driven solely by consolidation of capacity in a market or industry, the revenue increase would come from simple supply-demand dynamics that are much easier to understand. Maxine O. Asiedu 9 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln iv. Revenue enhancement through entry into new markets and industries A firm might decide on a merger reasons being that it is interested in a particular market or industry but lacks the know-how, then that will be an easier means of establishing itself. A lot of firms have used this reason to explain their interest in M&A. It is believed that by that means a firm will grow itself organically into the geographical market and acquire the required skills which would have taken it several years to acquire when on its own. Examples of companies that have gained on new market entries are Santander Central Hispano’s (SCH) and Abbey National, 2004 and as a result of that it attained the position of the leading retail financial institution in the UK without creating additional capacity. Many small firms are acquired by large ones for this very reason especially pharmaceutical companies merged with biotechnology firms so that they can draw strength from each other example is the Roche and Genentech, AstraZeneca and Cambridge Antibody Technology (CAT) and one that has raised concerns, Crestor and Exanta. v. Risk diversification or moderation Income stream becoming less volatile has been one major reason for M&A especially geographic or cross border and conglomerate type. This type of merger normally invests in a wide variety of products and markets and through that it pools unrelated stream of income to shareholders. A risk in reduction is received without decrease in return. The argument posed here is that investors can choose other means of reducing their risk either than merger. They can simply buy some shares in separately quoted markets. It is a way of diversifying ones investment so as to avoid putting all eggs into one basket. Cross borders M&A has also raised significantly firms are constantly seeking for places more favourable since it will push their profits higher and higher. For example low tax regions and stable condition will all promote the success of a business. Maxine O. Asiedu 10 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln vi. Tax Advantages Tax advantages are also earned by firms that make losses especially when they are in there is takeover some percentage of relief that is given to the acquiring company. This help as form of relief or benefit for the acquiring company. Furthermore tax advantages and reduction in risk may result to an increase in profit which may justify some M&A. Examples of acquisition made by CarPhone Warehouse may support this. Upon their takeover of AOL in 2006 their profit increase from £2,355,093 to £3,046,403 (Company Annual Report, 2006) especially in the US firms that make losses in a particular year can gain tax reductions in a future date. Tax loss carry-forwards can motivate mergers and acquisitions. vii. Internalisation of transactions The coming together of two firms at different stages of the production chain an acquirer may achieve more co-ordination from different levels. Here it is believed that cost advantages can be derived though communication, bargaining, monitoring compliance and contract enforcement. For example vertical integration ease uncertainties in supply or prospects of finding outlets. It also takes away the difficulties in hang to bargain with supplier or customer. This view is more in favour of vertical mergers since a backward or forward integration will help with raw materials to produce or market the finished products. Thus corporate diversification will be achieved through reduction in production or distribution cost. viii. Talent, knowledge and techniques to enhance revenue A reason for a firms merger can be because its interest in of apply talent, knowledge and techniques to the parent company’s existing future product lines in order to gain competitive advantage. Most Asian companies have this on the agenda and hence take interest in acquiring western firm’s example Shanghai Automotive Industry Corp merged with Britain’s MG Rover (Financial Times, 2004). Maxine O. Asiedu 11 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln Merger is therefore to maximise shareholders wealth but differences might be a problem just as Sir Richard Branson of Virgin Media Inc and Murdoch's British Sky are also experiencing difficulties in their merger (Business Week, 2007) ix. Bargain buying Bargain buying in terms of potential gains are expected when two firms are combined another motive explained by managers for mergers. The benefit that a firm can achieve is enormous therefore there is constant search for companies that are undervalued. There is the belief that stocks markets on few occasions undervalue shares and spot such undervalued share can be a niche when acquired. x. Inefficient management and Re-engineering Efficiency theory is another reason behind M&A. It is believed that companies which are under performing can be re-engineered by stronger acquirers but where acquirers fail the merger only can survive in the short run but cracks will begin to show on sooner and can lead to a break down. Achieving this is not easy because of differences that exist in the business cultures. AOL and Time Warner a financial marriage that took off on a more special note Valentine’s Day 2001 experienced such difficulties so the merger synergies was abandoned in 2002 the CEO Richard Parsons announced that each individual unit would focus on what they are good at individually. Over emphasizing the potential for collective good is a common mistake in synergistic mergers and AOL is not alone in misjudging the opportunities. It must be admitted as a common problem in M&A. xi. Managerial motive behind mergers is another issue that needs to be questioned. Is it always for the rational reasons they claim? Maximising shareholders wealth rather management personal interest. It have been questioned whether it is not the idea of being paid more? Higher remuneration status, prestige, power are said to be Maxine O. Asiedu 12 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln a motive M&A. Sometimes mergers happen with the aim of management satisfying their wants such as gained in managing hundreds and thousands of people in big titles CEO, Director etc. People by nature want to be known by influential positions they have held. For example the man who has headed so many big businesses around the world and for that matter will do anything in their power enter into M&A. Their experiences in such situations will never be questioned. A typical example is the case of M&S acquisition of Brooks brothers sited earlier. xii. Free Cash flow, Survival and Empire building These are all reasons behind the increase in merger activities. Firms in theory must retain their money within the firm and invest in any project which will in turn produce greater returns. Managers use this idea of investing for greater returns to justify actions. What is interesting is that both small and large firms are engaging in merger activities. Management believes that the best way to avoid a takeover and dominate is to grow large themselves the idea of eat or be eaten. Management in order to avoid being vulnerable merge for their survival but, not because of their claim maximise shareholders wealth. This technique will not only ensure the survival of the business but more a way to achieve empire building. xiii. Hubris is another reason that has been raised to explain the increase in mergers activities since there has not been a insignificant increase in growth in M&A. The reason could also be what was referred to as Hubris hypothesis by Roll, 1986. According to Roll managers may commit errors of over-optimism in evaluating merger opportunities due to excessive pride or faith in their own abilities. Some acquires do not learn from their mistakes let alone that of others. So was it the case that the resources of M&S couldn’t have contained Brooks Brother but still went ahead and acquired it. Maxine O. Asiedu 13 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln I believe that management of M&S had worthy intension of maximising the shareholders wealth but made a mistake by not doing their homework well. Acquirers should learn to follow procedures since it will help avoid problems. xiv. Third party motives are also the reason why some mergers take place. For M&A to take place the services of professionals like financial advisers, accountant, lawyers etc are sort and they charge some fees for providing those services. The intension of third parties can be that the more deals they negotiate the higher their take home can also be the reason increase M&A. this could be why despite considerable failure M&A are still happening. Advisers for example charge fees are charged for bidding, advising, identifying targets, etc Therefore advisors, accountants and lawyers may be keen on markets to merge. The press and tabloids to specialist publications will also spice up the marriage (financial) by portraying the glamorous sides of it. Just recently a Private equity group by name Terra Firma and medical charity (Wellcome Trust) have confirmed they are considering a rival takeover bid for Alliance Boots, UK. For the bid battle to be possible their offer will have to be above £10bn, 1,040p-a-share bid tabled by Kohlberg Kravis Roberts (KKR) and Italian Stefano Pessina the group, which was created in a £7bn tie-up with chemist chain Alliance Unichem last year, a company that supplies more than 125,000 pharmacies, health centres and hospitals (BBC, 2007) it must be emphasized that the reporter raised question what the effects of a private equity acquisitions might have on a pharmaceutical gaint Boot on the UK market but was it enough to send a message to shareholers? 1.9 Who benefit in mergers and public impression Who benefits from mergers? In terms of economies of scale it has been argued that goods are produced at lower cost therefore society will benefit but there will be less competition meaning two offsetting outcomes. Those who benefit are mainly directors of the acquiring companies, financial institutions. M&A is profitable for targets firms (chatterjee, 1986; Lubukin, 1987; Pinches et al, 1992) but insignificant (Singh and Maxine O. Asiedu 14 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln Montgomery 1987; Zollo and Singh 2001) some also argued its negative consequence for the buyer Hayward and Hambrick, 1997. It also can lead to job losses (Arnold, 1998) to the target. Public impressions on merger events vary depending on the group one belongs. Those benefiting are likely to be content and vice versa. 2. Conclusion From the above discussion, it can be concluded that though M&As have not led to significant enhancement of value of shares (Sirower,1997; Singh and Montegomery, 1987; Manedalkor,1992; Arnold, 2001p.1062.) they have the potential to create value for shareholders when well organised. In order to achieve good results from M&A, acquirers must be cautious, follow due procedures and avoid rush and over optimism in mergers. Maxine O. Asiedu 15 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln References Arnold, G (2005) Corporate Financial management, FT Prentice Hall 3rd edn Arnold,G (1998) Corporate Financial management, FT Prentice Hall 2nd edn Cornwell, C and Dietrich J K, (1978) “The Efficiency of the Market for Foreign Exchange Under Floating Exhange Rates” Review of Economics and Statistics, pp. 111120 Chatterjee (1986), Eckbo, E.B. (1983), "Horizontal mergers, collusion, and stockholder wealth", Journal of Financial Economics, pp. 241-273 op. cit, Charles Rutstein and Galen Schreck (2003), "A year later: HP can claim integration success", Forrester Research, May 9 D.J. Flanagan (1996), "Announcements of purely related and purely unrelated mergers and shareholder returns: Reconciling the relatedness paradox," Journal of Management, pp. 823-835. Friedman M, 1970 The social responsibility of business is to increase its profits NY Times Hill, C W Land Jones, G (2007) Strategic Management; An Intergrated Approach Boston NY Joseph L. B, (2001) "Not all M&As are alike - and that matters", Harvard Business Review, Vol. 79 No. 3, pp. 92 . Pike, R and Neale, B (2003) Corporate Finance and Investment decisions and strategies FT Prentice Hall 4th ed Porter, M (1985) Competitive Advantage New York: Free Press. Ross, SA Waterfield, R W & Jaff (2000) Corporate finance 6th edn NY McGrew Hill Sirower Mark L. (1997) The Synergy Trap: How Companies Lose the Acquisition Game, The Free Press, New York, NY. This book summarizes a stream of research starting with Sayan C, (1986) "Types of synergy and economic value: the impact of acquisitions on merging and rival firms," Strategic Management Journal, Vol. 7, pp. 119-139 Singh, H. and Montgomery, C. (1987), "Corporate acquisition strategies and economic performance” Strategic Management Journal Maxine O. Asiedu 16 Assignment Presentation Financial Mgt. Applications Lincoln Business School University of Lincoln http://www.hemscott.com/companies/company-chart.do?companyId http://fame.bvdep.com/version http://global.facitiva.com http://academic.mintel.com/?logon&ath_user=hum.da73d00&athk%3CRkppCKPEVO% 2BZxcUr1g%3E http://www.ft.com/home/uk http://proquest.umi.com/pqdweb?RQT=504&CERT=QXRoZW5zVXNlck Maxine O. Asiedu 17