Topics of Bachelor Theses Spring Semester 2017

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Topics of Bachelor Theses Spring Semester 2017 1. The Acquisition of Rite Aid by Walgreens Boots Alliance DCF On October 27th, 2015, Walgreens Boots Alliance Inc.

1 Topics of Bachelor Theses Spring Semester The Acquisition of Rite Aid by Walgreens Boots Alliance DCF On October 27th, 2015, Walgreens Boots Alliance Inc. announced a definite agreement to acquire Rite Aid Corp. for approximately $17.2 billion, including acquired net debt. Walgreens agreed to buy all outstanding shares of Rite Aid at $9 per share in cash, which represents a 48% premium on Rite Aid s closing price on the day before the announcement. Overall, the merger announcement was received positively by the stock market. Rite Aid s stock rose 43% on Oct. 27 and Walgreens shares rose by 6.4%. Walgreens Boots Alliance owns a number of pharmaceutical manufacturing, wholesale, and distribution companies. The subsidiary Walgreens operates the largest drugstore chain in the U.S. with more than 8,000 stores. Rite Aid is the third largest drugstore chain in the U.S. with a strong presence on the East Coast. The company today operates at more than 4,500 locations. Combined, Walgreens and Rite Aid would form the world s largest retail pharmacy chain. Hence it is expected that a combined company could gain substantial leverage with health insurance companies, large employers, and government health programs. The goal of the thesis is to value Rite Aid using DCF analysis and to estimate potential synergies from the transaction. The thesis should further investigate whether the transaction would create value for the shareholders of Rite Aid and Walgreens Boots Alliance, and whether the offer price was fair. - Page 1of 12 -

2 2. The Acquisition of Rite Aid by Walgreens Boots Alliance Multiples and Event Study Analysis On October 27th, 2015, Walgreens Boots Alliance Inc. announced a definite agreement to acquire Rite Aid Corp. for approximately $17.2 billion, including acquired net debt. Walgreens agreed to buy all outstanding shares of Rite Aid at $9 per share in cash, which represents a 48% premium on Rite Aid s closing price on the day before the announcement. Overall, the merger announcement was received positively by the stock market. Rite Aid s stock rose 43% on Oct. 27 and Walgreens shares rose by 6.4%. Walgreens Boots Alliance owns a number of pharmaceutical manufacturing, wholesale, and distribution companies. The subsidiary Walgreens operates the largest drugstore chain in the U.S. with more than 8,000 stores. Rite Aid is the third largest drugstore chain in the U.S. with a strong presence on the East Coast. The company today operates at more than 4,500 locations. Combined, Walgreens and Rite Aid would form the world s largest retail pharmacy chain. Hence it is expected that a combined company could gain substantial leverage with health insurance companies, large employers, and government health programs. The goal of the thesis is to value the target company, Rite Aid, with multiples of comparable companies and comparable transactions and to analyze whether the offer price was fair. The thesis should further examine the price reactions of Walgreens Boots Alliance, Rite Aid, and optionally their competitors on the announcement date using event study analysis. In addition, the author can examine other dates during the negotiation process. - Page 2of 12 -

3 3. Acquisition of DirectTV by AT&T- DCF 4. Acquisition of DirectTV by AT&T - Multiples and Event Study Analysis On 18 May 2014, AT&T announced the acquisition of DirectTV for $95 per share, in a deal value of $48.5 billion. The acquisition falls into a consolidation wave between internet and paid TV providers. Since more customers demand video on their mobile devices, the US wireless industry and television market are consolidating to catch up this increasing trend. After this merger, AT&T-DirecTV would be the US No. 2 provider of television subscribers after Comcast- Time Warner Cable. DirecTV was founded in 1994, currently the top 2 U.S. satellite TV provider with 20 million customers. AT&T Inc. is an US multinational telecommunications corporation, headquartered in downtown Dallas, Texas. AT&T is the second largest provider of mobile telephone and the largest provider of fixed telephone lines in the United States. AT&T's existing television service, called U-verse, has approximately 5 million subscribers. The goal of the thesis is to value DirecTV using DCF analysis and to estimate potential synergies from the transaction. The thesis should further investigate whether the transaction would create value for the shareholders of DirecTV and AT&T and to determine whether the price paid by AT&T was fair. On 18 May 2014, AT&T announced the acquisition of DirectTV for $95 per share, in a deal value of $48.5 billion. The acquisition falls into a consolidation wave between internet and paid TV providers. Since more customers demand video on their mobile devices, the US wireless industry and television market are consolidating to catch up this increasing trend. After this merger, AT&T-DirecTV would be the US No. 2 provider of television subscribers after Comcast- Time Warner Cable. DirecTV was founded in 1994, currently the top 2 U.S. satellite TV provider with 20 million customers. AT&T Inc. is an US multinational telecommunications corporation, headquartered in downtown Dallas, Texas. AT&T is the second largest provider of mobile telephone and the largest provider of fixed telephone lines in the United States. AT&T's existing television service, called U-verse, has approximately 5 million subscribers The goal of the thesis is to value Life Technologies Corp. using multiples at the time of a takeover announcement and to examine whether the offer price of $76 is fair. The thesis should further examine the price reactions of Life Technologies, Thermo Fisher, and optionally their competitors on the announcement date using event study analysis. - Page 3of 12 -

4 5. The acquisition of Lorillard Inc. by Reynolds-American Inc. DCF In early 2015, the American tobacco company Reynolds American Inc. and the US-based firm Lorillard Inc. entered an agreement under which Reynolds would acquire all outstanding shares of Lorillard for a total of $25 billion, or $68.88 per share. This offer price represents a 40.4% premium to the closing price of Lorillard s stock on February 28, 2014, the last trading day prior to initial media speculation around a possible transaction. The deal was completed after the Federal Trade Commission ap-proved it on May 27, Lorillard is the third-largest tobacco company in the U.S. and maker of Newport cigarettes. Reynolds, in turn, is the second largest tobacco company in the U.S. The combined company will be the second largest tobacco company behind Altria Group Inc. with a market share of 33%. Combined sales are expected to approach $11 billion per year. According to Susan M. Cameron, CEO of Reynolds American Inc. the acquisition will increase the financial capabilities to in-crease investment in R&D. The deal will also strengthen and di-versify Reynolds cigarette portfolio by adding Newport, the market leader in the U.S. menthol category. Further, Lorillard has a strong presence in the Eastern U.S. which will complement Reynolds with its core focus on the Western U.S. The goal of the thesis is to value Lorillard using DCF analysis and to estimate potential synergies from the transaction. The thesis should further investigate whether the transaction would create value for the shareholders of Reynolds- American and Lorillard and to determine whether the price paid by Reynolds American was fair. - Page 4of 12 -

5 6. The acquisition of Lorillard Inc. by Reynolds-American Inc. - Multiples and Event Study Analysis In early 2015, the American tobacco company Reynolds American Inc. and the US-based firm Lorillard Inc. entered an agreement under which Reynolds would acquire all outstanding shares of Lorillard for a total of $25 billion, or $68.88 per share. This offer price represents a 40.4% premium to the closing price of Lorillard s stock on February 28, 2014, the last trading day prior to initial media speculation around a possible transaction. The deal was completed after the Federal Trade Commission approved it on May 27, Lorillard is the third largest tobacco company in the U.S. and maker of Newport cigarettes. Reynolds, in turn, is the second largest tobacco company in the U.S. The combined company will be the second largest tobacco company behind Altria Group Inc. with a market share of 33%. Combined sales are expected to approach $11 billion per year. According to Susan M. Cameron, CEO of Reynolds American Inc. the acquisition will increase the financial capabilities to increase investment in R&D. The deal will also strengthen and diversify Reynolds cigarette portfolio by adding Newport, the market leader in the U.S. menthol category. Further, Lorillard has a strong presence in the Eastern U.S. which will complement Reynolds with its core focus on the Western U.S. The goal of the thesis is to value the target company, Lorillard, with multiples of comparable companies and comparable transactions and to analyze whether the offer price was fair. The thesis should further examine the price reactions of Reynolds American, Lorillard, and if possible their competitors on the announcement date using event study analysis. In addition, the author can examine other dates during the negotiation process. - Page 5of 12 -

6 7. The Acquisition of Monsanto by Bayer DCF On May 23, 2016, the multinational chemical and pharmaceutical company Bayer AG announced that it plans to acquire the multinational agrochemical and agricultural biotechnology corporation Monsanto. The acquisition of Monsanto would be a compelling opportunity to create a global agriculture leader, while reinforcing Bayer as a Life Science company with a deepened position in a long-term growth industry. Bayer AG is a German multinational chemical and pharmaceutical company headquartered in Leverkusen, North Rhine-Westphalia, Germany. Bayer's primary areas of business include human and veterinary pharmaceuticals; consumer healthcare products; agricultural chemicals and biotechnology products; and high value polymers. Monsanto Company is a publicly traded American multinational agrochemical and agricultural biotechnology corporation headquartered in Creve Coeur, St. Louis, Missouri. It is a leading producer of genetically engineered (GE) seed and Roundup, a glyphosate-based herbicide. Monsanto's role in agricultural changes, biotechnology products, lobbying of government agencies, and history as a chemical company have made the company controversial. The goal of the thesis is to value Monsanto using DCF analysis and to estimate potential synergies from the transaction. The thesis should further investigate whether the transaction would create value for the shareholders of Bayer AG and Monsanto Company, and whether the offer price was fair. - Page 6of 12 -

7 8. The Acquisition of Monsanto by Bayer Multiples and Event Study Analysis On May 23, 2016, the multinational chemical and pharmaceutical company Bayer AG announced that it plans to acquire the multinational agrochemical and agricultural biotechnology corporation Monsanto. The acquisition of Monsanto would be a compelling opportunity to create a global agriculture leader, while reinforcing Bayer as a Life Science company with a deepened position in a long-term growth industry. Bayer AG is a German multinational chemical and pharmaceutical company headquartered in Leverkusen, North Rhine-Westphalia, Germany. Bayer's primary areas of business include human and veterinary pharmaceuticals; consumer healthcare products; agricultural chemicals and biotechnology products; and high value polymers. Monsanto Company is a publicly traded American multinational agrochemical and agricultural biotechnology corporation headquartered in Creve Coeur, St. Louis, Missouri. It is a leading producer of genetically engineered (GE) seed and Roundup, a glyphosate-based herbicide. Monsanto's role in agricultural changes, biotechnology products, lobbying of government agencies, and history as a chemical company have made the company controversial. The goal of the thesis is to value the target company, Monsanto Company, with multiples of comparable companies and comparable transactions and to analyze whether the offer price was fair. The thesis should further examine the price reactions of Bayer AG, Monsanto, and optionally their competitors on the announcement date using event study analysis. - Page 7of 12 -

8 9. FedEx s takeover bid for TNT Express - DCF 10. FedEx s takeover bid for TNT Express - Multiples and Event Study Analysis On April 7th, 2015, the US Courier giant FedEx Corporation announced a 4.4bn takeover bid for the Belgian Courier company TNT Express. In a joint statement, the two companies announced that FedEx will make an all-cash offer of 8.00 per TNT Express share which represents a 33% premium on TNT s share price before the announcement. TNT s executive and supervisory boards have unanimously recommended the deal and its largest shareholder, PostNL, has agreed to sell its 14.7% shareholding. TNT Express was originally created in a demerger from its parent company TNT N.V in May The remaining part of TNT N.V. renamed itself to PostNL and put its strategic focus on mail delivery in the Netherlands while TNT Express would focus on international courier delivery services. Today TNT Express is one of the world s largest express delivery companies with a global reach to 200 countries and a strong position in Europe. The goal of the thesis is to value TNT Express using DCF analysis and to estimate potential synergies from the transaction. The thesis should further investigate whether the transaction would create value for the shareholders of TNT Express and FedEx Corporation and to determine whether the price offered by FedEx was fair. On April 7th, 2015, the US Courier giant FedEx Corporation announced a 4.4bn takeover bid for the Belgian Courier company TNT Express. In a joint statement, the two companies announced that FedEx will make an all-cash offer of 8.00 per TNT Express share which represents a 33% premium on TNT s share price before the announcement. TNT s executive and supervisory boards have unanimously recommended the deal and its largest shareholder, PostNL, has agreed to sell its 14.7% shareholding. TNT Express was originally created in a demerger from its parent company TNT N.V in May The remaining part of TNT N.V. renamed itself to PostNL and put its strategic focus on mail delivery in the Netherlands, while TNT Express would focus on international courier delivery services. Today TNT Express is one of the world s largest express delivery companies with a global reach to 200 countries and a strong position in Europe. The goal of the thesis is to value TNT Express using multiples at the time of a takeover announcement and to examine whether the offer price of 8.00 is fair. The thesis should further examine the price reactions of TNT Express, FedEx Corporation, and optionally their competitors on the announcement date using event study analysis. - Page 8of 12 -

9 11. Nokia s Acquisition of Alcatel-Lucent - Multiples and Event Study Analysis In a joint press release on April 15th, 2015 the Finish telecommunication company Nokia and its French-American competitor Alcatel-Lucent announced their intention to merge in a 15.6bn-transaction. Nokia offers 0.55 Nokia shares for every Alcatel-Lucent share corresponding to a premium of 28% relative to Alcatel-Lucent s weighted-average share price of the previous three months. The combined entity will become one of the largest telecommunication equipment manufacturers in the world with an estimated market share of 35%, close to the Sweden s Ericsson and China s Huawei. Nokia is well-known as a major contributor to the mobile telephony industry and was for a period, the largest vendor of mobile phones in the world. Nokia's dominance also extended into the smartphone industry, but it was soon overshadowed by the growing dominance of Apple's iphone line and Android devices. Today, the company s business focuses on large-scale telecommunications infrastructures, and technology development and licensing. Alcatel-Lucent is one of the world s leading providers of telecommunication and network equipment. The company was formed in 2006 when France s Alcatel merged with the US corporation Lucent Technologies in a merger process, which was accompanied by a series of profit warnings and significant write-downs of Lucent's assets. The goal of the thesis is to value both companies with multiples of comparable companies and comparable transactions and to analyze whether the offer price was fair. The thesis should further examine the price reactions of Nokia, Alcatel-Lucent, and optionally their competitors on the announcement date using event study analysis. - Page 9of 12 -

10 12. The (failed) acquisition of Allergan by Pfizer - Multiples and Event Study Analysis On November 23, 2015, Pfizer Inc. and Allergan, Plc publicly announced their intention to merge to form the world s largest drug maker. The boards of both companies had ratified the deal worth approximately $160 billion the day before. This sum would make it not only the largest pharmaceutical deal ever, but also the third largest corporate merger in history. The takeover would also be the largest so-called inversion deal to date. These deals consist of a US company buying a foreign rival to adopt their lower tax jurisdictions. To achieve this goal, Dublin-based Allergan would buy the larger New-York based Pfizer in a reverse merger. Just days before the announcement of the merger, the Treasury Department released new rules aiming to curb tax-lowering inversion deals. On April 6, 2016, Pfizer and Allergan announced they would be calling off the merger. 13. The (failed) acquisition of Allergan by Pfizer DCF The goal of the thesis is to value Allergan using multiples at the time of a takeover announcement and to examine whether the offer price is fair. The thesis should further examine the price reactions of Allergan, Pfizer, and optionally their competitors on the announcement date using event study analysis. On November 23, 2015, Pfizer Inc. and Allergan, Plc publicly announced their intention to merge to form the world s largest drug maker. The boards of both companies had ratified the deal worth approximately $160 billion the day before. This sum would make it not only the largest pharmaceutical deal ever, but also the third largest corporate merger in history. The takeover would also be the largest so-called inversion deal to date. These deals consist of a US company buying a foreign rival to adopt their lower tax jurisdictions. To achieve this goal, Dublin-based Allergan would buy the larger New-York based Pfizer in a reverse merger. Just days before the announcement of the merger, the Treasury Department released new rules aiming to curb tax-lowering inversion deals. On April 6, 2016, Pfizer and Allergan announced they would be calling off the merger. The goal of the thesis is to value Allergan using DCF analysis and to estimate potential synergies from the transaction. The thesis should further investigate whether the transaction would create value for the shareholders of Allergan and Pfizer, and whether the offer price was fair. - Page 10of 12 -

11 14. Royal Dutch Shell s takeover bid for BG Group - Multiples and Event Study Analysis On April 8 th, 2015 Ben van Beurden, CEO of Royal Dutch Shell, and Andrew Gould, Chairman of BG Group, announced that the two companies have reached an agreement on the takeover of BG Group by Shell. The takeover will be one of the largest takeovers in the oil sector and should extend Shell s dominance of the global natural gas industry. The agreement on 383p cash plus Shell B shares per BG Group share will give a 52% premium to BG s shareholders. The deal values BG Group at a total of 47bn and will create a company with a combined market capitalization of more than 200bn. The deal comes at a time of high uncertainty for the oil and gas industry. In the past six months the price of oil has fallen by about 50%. In February BG Group issued a statement that it would write down the value of its oil and gas assets due to the oil price slump. Shell already announced in January that it would heavily cut spending over the next years. Nevertheless, the Shell s management is willing to pay a high premium justified by claiming that the deal will create significant synergies due to complementary portfolios and lead to higher payouts to the shareholders of the two companies. The goal of the thesis is to value BG Group using multiples at the time of a takeover announcement and to examine whether the offer price is fair. The thesis should further examine the price reactions of Shell, BG Group, and optionally their competitors on the announcement date using event study analysis. - Page 11of 12 -

12 15. Royal Dutch Shell s takeover bid for BG Group DCF On April 8 th, 2015 Ben van Beurden, CEO of Royal Dutch Shell, and Andrew Gould, Chairman of BG Group, announced that the two companies have reached an agreement on the takeover of BG Group by Shell. The takeover will be one of the largest takeovers in the oil sector and should extend Shell s dominance of the global natural gas industry. The agreement on 383p cash plus Shell B shares per BG Group share will give a 52% premium to BG s shareholders. The deal values BG Group at a total of 47bn and will create a company with a combined market capitalization of more than 200bn. The deal comes at a time of high uncertainty for the oil and gas industry. In the past six months the price of oil has fallen by about 50%. In February BG Group issued a statement that it would write down the value of its oil and gas assets due to the oil price slump. Shell already announced in January that it would heavily cut spending over the next years. Nevertheless, the Shell s management is willing to pay a high premium justified by claiming that the deal will create significant synergies due to complementary portfolios and lead to higher payouts to the shareholders of the two companies. The goal of the thesis is to value BG Group using DCF analysis and to estimate potential synergies from the transaction. The thesis should further investigate whether the transaction would create value for the shareholders of BG Group and Royal Dutch Shell, and whether the offer price was fair. - Page 12of 12 -

Topics of Bachelor Theses Spring Semester 2018

Topics of Bachelor Theses Spring Semester 2018 1. The acquisition of Mobileye by Intel DCF On March 13, 2017, Intel Corp (INTC.O) announced that it had agreed to purchase the Israeli autonomous vehicle