688A_Case_Questions_Final_2023

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Jan 9, 2024

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FIN 688A Mergers, Acquisitions, and Other Corporate Restructurings Heinz Acquisition Case Questions Final Exam Fall 2023 1. Describe the activities of Nelson Peltz and the role he played in laying the groundwork for the acquisition by Berkshire Hathaway and 3G. 2. Discuss the positions of various stakeholders, including Heinz shareholders, management, employees, and citizens of Pittsburgh. 3. Discuss the go-shop process, explaining why it may be necessary and listing any risks associated with it. 4. Why were so many investment bankers involved in this transaction, and what were their respective roles? 5. What was the acquisition premium? Was this reasonable? 6. Complete a valuation of Heinz for this acquisition based on the provided actual financial information. Develop a football field valuation analysis, stating reasons why you selected certain companies to include in your comparable companies and comparable transaction analyses. 7. Why did this transaction propose zero synergies? Discuss and quantify potential synergies that could be realized, including where they come from and the period of time over which they can be realized, and quantify the impact on enterprise valuation. 8. What was the market reaction to the acquisition announcement, including share price and equity analyst commentary? 9. What was the reason for an all-cash transaction, and what are the disadvantages of this form of consideration (as opposed to using common shares as consideration)? What are the principal risks and benefits of this transaction for $3 \mathrm{G}$ and Berkshire Hathaway? 10. Should financial sponsors have been included in the list of prospective buyers? Why, or why not? 11. Complete a separate valuation based on the Heinz alternative financial assumptions found in the Heinz Exhibits Spreadsheet, under the HNZ Alt tab.
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