Part VIII Video Case

These questions are based on Canadian Broadcasting Corporation videos that accompany the textbook. In addition to whatever in-class use your instructor may have given them, they're available on this website for online viewing. If directed to do so by your instructor, you can answer the discussion questions online and email the results.
     These videos are intended only for students using the 4th Canadian Edition of Fundamentals of Corporate Finance. To view the video, you'll require a password. Refer to page 472 in your textbook and use the first word appearing in the main text column as both 'username' and 'password.' Use of the word is case-sensitive.
     The free RealPlayer plug-in is required in order to view the videos. If needed, the plug-in can be downloaded from Real.

Merger Madness
The Merger Game: Bigger is better seems to be the motto of many North American managers. The latest merger wave to hit Canada and the United States touched down in the late 1990s, peaking in 1999. Like every other merger wave before, it was the largest and produced record multi-billion-dollar deals. Like every other merger wave before, it left behind quite a few mega-companies struggling.
     This video segment takes a good look at what happens when the merger euphoria has dissipated. In theory, the pursuit of synergies turns all parties into winners. In reality, many shareholders see their wealth decrease as a result of poor investment choices made by management.

Additional Resources:
Canada's Business and Consumer Site
Read about the efficiency of Canadian mergers
Canada's Competition Bureau
A list with M&A specialists and dealmakers in the USA
Yahoo's M&A calendar
Air Canada
Future Shop

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View Merger Madness

1		In the late 1990s, mergers have blossomed again in Canada and the United States. Why would managers continue to want to merge their companies when there is plenty of evidence suggesting that a majority of mergers result in losses for shareholders?
2		Who do you think is getting the better deal: the shareholders of the acquiring company or those of the target company?
3		Can you think of a recent high profile Canadian merger where the acquirer appears to have overpaid for the target?