This will be a report to the board of directors that identifies a synergistic acquisition candidate for your company.

This is part of a team assignment. This will be a report to the board of directors that identifies a synergistic acquisition candidate for your company. An acquisition of UST by Altria. The 2006 annual report for both companies are attached.

Need Help Writing an Essay?

Our team of talented writers is ready to assist. We offer essay writing help in over 75 disciplines, ensuring a convenient and comprehensive solution for all your academic needs!

Get Help Now!

i. This report should clearly identify the following:
1) Your proposed acquisition terms
2) Price
3) Financing
4) Potential negotiation strategies
j. Supporting financial data should include the following:
1) Price/earnings ratios
2) Book value
3) Current market value
4) Liquidation
5) Diluted price per share
6) Capital Budgeting tools (NPV, IRR, Profitability index, payback – optional: Discounted Payback and Modified Internal Rate of Return)
k. Discuss the general risks inherent in an acquisition strategy.
l. Discuss the specific risks that should be included in the quantitative analysis. For example, what risk factors should be included in the discount rate (sometimes known as the hurdle rate, or required rate of return).
Note: Use MS Excel® spreadsheets as support showing your computations where applicable.

Merger & Acquisition

This is part of a team assignment. This will be a report to the board of directors that identifies a synergistic acquisition candidate for your company. An acquisition of UST by Altria. The 2006 annual report for both companies are attached.

i. This report should clearly identify the following:
1) Your proposed acquisition terms
2) Price
3) Financing
4) Potential negotiation strategies
j. Supporting financial data should include the following:
1) Price/earnings ratios
2) Book value
3) Current market value
4) Liquidation
5) Diluted price per share
6) Capital Budgeting tools (NPV, IRR, Profitability index, payback – optional: Discounted Payback and Modified Internal Rate of Return)
k. Discuss the general risks inherent in an acquisition strategy.
l. Discuss the specific risks that should be included in the quantitative analysis. For example, what risk factors should be included in the discount rate (sometimes known as the hurdle rate, or required rate of return).

Altria’s subsidiaries operate globally, with manufacturing and sales facilities in various locations around the world.

Competition and Economic Downturns: Each of the consumer products of it is subject to intense competition, changes in consumer preferences and local economic conditions. To be successful, they must continue to:
? Promote brand equity successfully;
? Anticipate and respond to new consumer trends;
? Develop new products and markets and to broaden brand portfolios in
? order to compete effectively with lower priced products;
? Improve productivity; and
? Respond effectively to changing prices for their raw materials.
? There are risks related to the environment, health hazards and technology changes.

(PMI) Philip Morris International part of Altria Group had many acquisitions in the previous years. During 2004, PMI purchased a tobacco business in Finland for a cost of approximately $42 million. Also, during 2004, PMI reached an agreement to acquire Coltabaco, the largest tobacco company in Colombia, with a 48% market share. PMI expects to close the transaction in the beginning of 2005, for approximately $310 million. During 2003, PMI purchased approximately 74.2% of a tobacco business in Serbia for a cost of approximately $486 million, and in 2004, PMI increased its ownership interest to