Table of Contents
摘 要 .......................................................................................................... 2 Abstract ....................................................................................................... 4 1 Introduction ........................................................................................... 8
1.1 Background ....................................................................................................... 8 1.2 Research Purposes and Significance .............................................................. 11 1.3 Content and Methodology .............................................................................. 13
2 Literature Review ............................................................................... 19
2.1 Discounted Cash flow ..................................................................................... 19 2.2 Synergy Valuation .......................................................................................... 22 2.3 Extant Literature ............................................................................................. 23
3 An Introduction to Skype and Microsoft ......................................... 25
3.1 Brief Profile of Skype ..................................................................................... 25 3.2 Brief Profile of Microsoft ............................................................................... 30 3.3 M&As Process ................................................................................................ 32
4 Intrinsic Value ..................................................................................... 33
4.1 Cost of Debt .................................................................................................... 33 4.2 Cost of Equity ................................................................................................. 38 4.3 Market Betas ................................................................................................... 42 4.4 Cost of Capital ................................................................................................ 47 4.5 Assumptions .................................................................................................... 47 4.6 Cash Flow to Firm .......................................................................................... 51
5 Synergy Value ..................................................................................... 54
5.1 Smartphone Industry ....................................................................................... 55 5.2 Xbox 360 Kinect + Skype = Magic ................................................................ 58 5.3 Benchmarks (proxies) ..................................................................................... 61
Conclusion ................................................................................................. 62 Acknowledgement .................................................................................... 63 References ................................................................................................. 64
5 / 66
List of Tables
Table 3.1: Balance Sheet Data .................................................................................... 27 Table 3.2: Cash Flow Data .......................................................................................... 27 Table 3.3: Statement of Operation from 2006 to 2010 ............................................... 28 Table 3.4: Adjusted EBITDA ...................................................................................... 29 Table 3.5: Microsoft?s Financial Highlights ............................................................... 30 Table 4.1: A summary of the median ratios from 2006 to 2008 ................................. 34 Table 4.2: Default Spread and Interest Rate on Bond ................................................. 35 Table 4.3: Calculating Skype?s Cost of Debt based on the procedure above ............. 36 Table 4.4: U.S. Treasury Yields (According to CNNMoney) .................................... 38 Table 4.5: S&P Market Index and eBay Stock Price Data ......................................... 44 Table 4.6: Inputs for WACC Model ............................................................................ 47 Table 4.7: Growth in Users for Registered and Paying Users .................................... 48 Table 4.8 : Growth in Revenue and Adjusted EBIT ................................................... 49 Table 4.9: Inputs for Free Cash Flow to Firm ............................................................. 51 Table 4.10: Free Cash Flow to Firm Forecast ............................................................. 52 Table 4.11: Intrinsic Value of Skype ......................................................................... 53 Table 5.1: Worldwide Mobile Communications Device Open OS Sales to End Users by OS (Thousands of Units) ........................................................................................ 55 Table 5.2: Windows Phone vs. iOS vs. Android ......................................................... 56 Table 5.3: The Synergy Value between Microsoft and Skype in Smartphone Sector 57 Table 5.4: Hardware Annual Summary ....................................................................... 59 Table 5.5: Average Sales and Geometric Average of Xbox ....................................... 60 Table 5.6: Market Share of X360 until 2015 .............................................................. 60 Table 5.7: Total Revenue until 2015 ........................................................................... 60
6 / 66
List of Figures
Figure 1.1 – Contents of Study .................................................................................... 13 Figure 1.2 – Evaluating the value of mergers and acquisitions .................................. 14 Figure 1.3 – Firm Valuation Model ............................................................................ 16 Figure 1.4 – Synergy and Value .................................................................................. 17 Figure 1.5 – Methodology ........................................................................................... 18 Figure 3.1 – Microsoft?s Equity Beta .......................................................................... 31 Figure 4.1 – Skype?s Equity Beta ................................................................................ 43 Figure 4.2 – Registered Users and Paying Users ........................................................ 48
7 / 66
1 Introduction
1.1
Background
Globalization is the worldwide trend of businesses expanding beyond the domestic
boundaries. Companies, small or large, public or private, are increasingly engaged in the international competition now. These things make the world is becoming one connected economy in which companies do business and compete anywhere with anyone, regardless of national boundaries. Due to the forces of globalization which have caused economies to become integrated, there is a realization among firms that these traditional ways of achieving competitive advantage now have only limited profitability. As a result, mergers and acquisitions have become an increasingly popular strategic choice for organizations (Nahavandi and Malekzadeh, 1988; McEntrie and Bentley, 1996; Zhu and Huang, 2007).
A merger occurs when one corporation is combined with another corporation. All mergers
are statutory mergers, since all mergers occur as specific formal transactions in accordance with the law, or statues, of the states where they are incorporated. A corporate acquisition is the process by which the stock or assets of a corporation come to be owned by a buyer. The transaction may take the form of a purchase of stock or a purchase of assets. Acquisition is the generic term used to describe a transfer of ownership. Merger is a narrow, technical term for a particular legal procedure that may or may not follow an acquisition.
The value of worldwide M&A totaled US$799.8 billion during the first quarter of 2011, a
54.7% increase from comparable 2010 levels and the strongest quarter for worldwide M&A since the second quarter of 2008. By number of deals, M&A activity fell 4.9% compared to the last year with just over 9.600 announced deals. First quarter M&A activity was driven by deals over US$5 billion, which totaled US$331.5 billion and announced for 41.2% of quarterly activity, more than double activity seen during the first quarter of 2010. 1.1.1 Motives of Mergers and Acquisitions
There are so many reasons to explain why corporation wants to choose Mergers and
Acquisitions. Some main motives behind Mergers and Acquisitions:
Traditionally, exploiting economies of scope and scale or taking advantage of market
imperfections was deemed by firms a dominant way of achieving competitive advantage. As M&As are often seen as a means to acquire resources, advanced technology and managerial know-how,
8 / 66
