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Looking for Mergers and Acquisitions and Financial Risk Manager Assignment Answers in UAE

Mergers and acquisitions (M&A) executed in UAE markets in 2016 highlight companies’ well-implemented wealth management that contributes to the general economy and the private sector, analysts told Mubasher.

Statistics by Mubasher show that the top M&A deals carried out in the UAE totaled AED 657 billion ($178.99 billion) in 2016 and involved 13 companies.

First Gulf Bank’s (FGB) merger with the National Bank of Abu Dhabi (NBAD) led M&A deals in the Gulf country. The merger deal will result in creating the UAE’s largest financial institution with total assets worth nearly AED 655 billion ($178 billion).

Coming in second place on the list is AlSafwa Islamic Financial Services’ merger with Mubasher Financial Services (MFS), which brought about Al Safwa Mubasher Financial Services as of 16 November 2016, with a capital of AED 563.88 million.

M&A deals carried out under the current difficult economic circumstances help companies boost their financial positions and their competitive edge as well as help reduce costs and operating risks, commented market analyst Mohamed Al-Azmy.

Market analyst Nawwaf El-Tayea noted that one of the main benefits of M&A deals is that they reduce the time needed to create a new company. He added that these deals often result in quick revenues for the companies.

Question 4: Answer the following questions.

a] Define the factors that will drive shareholder value in your organisation. Also describe, giving reasons, if or if not a focus on shareholder value creation will lead to better decision making in your organisation?

b] What is the meaning of Value Based Management and evaluate the methods to measure achievements in an organization. Describe the key factors that drive corporate to undertake restructuring such as M&A etc.?

c] Explain the steps involved and describe the key steps followed in a M&A and divestment transaction. Analyze the following situation and provide your opinion.

Acme Engineering is evaluating options for its steel fabricating division. In 2013, the division has sales of $ 400 million but reported an operating loss of $ 35 million. The company believes that the division has potential to turn around but ACME’s senior management has not been able to focus their attention on this division as it constitutes only 25% of its total sales with the balance coming from its heavy machinery division which had sales of $ 1,200 million and an operating profit of $ 150 million.

Describe, giving reasons, what should, in your view, be a possible restructuring option that the company could consider for its steel fabricating division assuming that division has a value of $ 80 million. Also briefly outline the process that the company should follow to implement your suggested option.

[Total-20 marks]

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