April 28, 2015 at 9:27 am #243042
Im doing topic 19. I have searched the forums for information about topic 19 but I only found one that didnt have a reply. My strength is financial management and the company I decided to do my project was acquired about 9 years hence my choice of topic 19. Im using the Kaplan Oxford Brookes project guide so I have an idea of what I ought to do but Im totally lost on the years to do my analysis on. My issue is my topic appears to require pre, post and current ratio analysis. The 2015 exemplar actually states on page 3,
“through detailed analysis of the financial position pre-acquisition and post-acquisition, and to analyse the reasons for any improvement or decline; along with outlining operational consequences of the acquisition.”
Do I then have to have a 3 year pre-acq, 3 year post and 3 most recent years analysis as in topic 8?
Im totally stuck now as I do not think 7500 words will be enough to make a thorough analysis of so many years.
The company is in the retail industry, which model can I use?
Do I have to analyse any parent data or just the acquired firm?
Is it a must to use a comparator for the pre and post analysis or I can just use the comparator to compare the acquired companies most financial performance.
Please help! From your advice on other topic I know I can rely on your advice.
Thank you for your time.
April 28, 2015 at 12:04 pm #243075
@ruva – Thank you for taking the time to search for your topic. Topic 19 “An analysis and evaluation of the financial and operational consequences of a merger between two organisations or of the acquisition of one organisation by another” as you have discovered is not a popular topic I suspect because it involves a fair amount of research and application whereas some of the topics tend to be approached in a bit of a rote manner!
I have a few constraints on my time right now so I will answer in more detail either later today or tomorrow. What I suggest you do though is read through my whole 3 part article on Evaluation available via our homepage http://www.opentuition.com/obu to get a feel for the general approach to Evaluation and Analysis (as this is the key element for passing and a frequent cause of failure). Then I suggest that you copy your question above to the existing Topic 19 (even if there are no answers yet on there) so that we can develop this topic. (you should be able to use the normal copy and paste facility to do this)
Briefly regarding your questions about a comparator – no, one is not relevant for T19 – this is a T8 requirement and again the 3 years comparisons are not relevant either. Your focus should be on setting out what the business (and if possible the financial) objectives of the merger/acquisition were and then evaluating whether and how well these were achieved (or not achieved as the case maybe). Have a think about how you can obtain research data for this and I will explore some research approaches with you when I have more time.
Trephena – OT OBU Forum Moderator
April 30, 2015 at 12:26 am #243311
Good day Trephena,
Thank you so much for taking the time to reply. I will copy and paste as you have stated. I have also read the 3 part article and it has been very helpful.
April 30, 2015 at 8:55 am #243354
I will admit that my actual strength for you with this topic will be more a case of telling you what to avoid and giving advice of a more general nature rather than being able to tell you what you should do in detail… I did work for a company (that is now a household name in the UK) that was involved in a merger several years ago but I was a (willing) victim of one of the thousands of redundancies that preceded the actual merger so wasn’t actually involved in it. I therefore am only able to draw upon a limited amount of experience! (By the way I don’t know if you intended to submit in P31 but I think it would be a Herculean task to do this adequately now to meet the Assessment Criteria for P30 unless you have absolutely no other commitments and it would still be quite a feat then as you have less than 3 weeks to go)
Notwithstanding this – the most important thing for you right now will be to set VERY clear objectives that are related to the topic title (statement of the obvious I know but you would be surprised how many people start to deviate right from the start!). The objectives should be used to guide your research and your findings should demonstrate that you have used these to come to your conclusions. The Kaplan book should help you with this but also I suggest that you take a look at Google Scholar and feed in a few key words e.g. by using the phrase “Evaluating a merger” I was able to bring up some academic articles. Many of these will be to a certain extent far too advanced in their level of detail they go into, particularly when it comes to the mathematical formulae (unless you already have a maths degree!), however the early parts of them will give you some indication of factors that you should try to investigate e.g. Operating efficiencies, employee productivity, profit performance and average relative efficiency pre and post merger.
Note: With Google Scholar you will find that many of the articles are from journals and have to be bought BUT if you look at the right hand side you will find that occasionally some are available as pdf / htlm and these are usually free (another trick if you find any that you have to pay for, is to feed the author name and title into another search and sometimes you may find that the author has allowed their own version to be made available FOC). I don’t know if this will be of any use to you but you may find this checklist can be adapted for your purpose for example so take a look as at this point you need to get some ideas::
Regarding models – you may be able to adapt some that you find in the articles otherwise you should be able to fall back on the SWOT and PESTLE. In this case you need to apply them specifically in the context of the merger – the strengths that the merger has brought out and any weaknesses that it may entail (you could to a pre and post SWOT even).
Remember your analysis and findings will dictate the grade (and whether you pass or fail) and you have to show that you have made a contribution of your own to the analysis not just described what went on.
Again I have run out of time right now but let me know how you are getting on with the above.
May 1, 2015 at 10:40 am #243492
Thank you for taking time to help people like myself. I am very grateful.
I am submitting in period 30 and have done most of the ground work. I am able to put in at least 6 hours a day and I am currently a full-time student. My report is about 3000 words so far. My project objectives and research questions my report will answer are already in place. I am moving on to the remaining 4500 which will be the analysis part and indeed the most important. I have researched about the acquired company and already have my SWOT analysis ready to type. I have captured my post-acquisition financials for the acquired company and its competitor and have already done the ratio analysis. I am well-versed in IT so the graphs will not take me long to do. I am left with the pre-acquisition financials as I did not know what to do but since getting help from you I am clearer. I think this part will be quicker as I already have the template from the pre-acq financials.
I also want to apply a model to do a business analysis of the parent but I am yet to determine which one best fits my report.
I had been using Google scholar but not as effectively as you mentioned.
Do you still think I am doing the impossible?
Thank you once again for your help.
May 1, 2015 at 11:05 am #243495
@ruva – If part of your RAP is already complete and you have a clear plan and the relevant skills then no, it is not impossible. Your main focus must be on setting out relevant objectives that will fulfil the RAP title and being able to evaluate your findings adequately.
I normally would recommend 3 months for a Grade A standard RAP and at least a month for a basic pass but that is a general guide as student ability varies considerably.
BTW the word count for Parts 1 & 2 are merely a Guide and without doubt it is the quality of the Evaluation & Analysis that will determine whether you pass or fail. The marker will want to see what you are “bringing to the party” – and will grade you mostly on what you are adding (after all just citing what has gone on and using other people’s work without critically assessing it does not really demonstrate any real skills apart from being able to research and edit!). Analyse the impact of the merger on various stakeholders and support this with evidence from your research (all well referenced of course!) and show how the merger has impacted on the financials and offer sensible commentary on this (again with independent evidence from business articles if possible) and remember ratio analysis on its own is just a tool – a means to an end (it is the end that is important i.e. the significance of the ratios in the context of the merger and what has driven them). This way you will avoid the common trap of many topics of not bringing in any original work by merely describing what has gone on and making obvious statements.
PS I am not sure why you are still insisting on having a competitor – this would normally be superfluous and should only be included IF you can show how it really relates to the RAP title and is relevant to your findings
Good luck! 🙂
May 1, 2015 at 2:02 pm #243515
Thank you once again.
I saw the issue of the comparator/ competitor from the 2015 exampler. I also didnt see the reason since the project is generally about evaluating financial and operational consequences.
It would be such a huge relief as the issues surrounding the acqujsition are many and very interesting. You initially said your strength is what not to do but it appears everything you are advising me is so spot on.
I have downloaded and read over 50 journals and articles. I also have a couple of relevant texts.
I will definetly update you on my anslysis.
Thank you a million times over. You are just too kind ????
May 1, 2015 at 4:46 pm #243534
@ruva – at the risk of sounding like a stuck record: just keep your objectives clear and present the evidence that answers your research questions clearly in the Findings. When you do your conclusions and any recommendations they need to be based on what you found (you would be surprised how many students make sweeping statements about how a company has achieved this and that without having supplied any evidence in their findings to base such statements on > result > FAIL)
Evaluate your findings from different points of view e.g. cutting overheads through redundancies may have helped margins and increased the share price but has it demotivated workers who remain as they may now have extra duties and no more pay for this? etc (This approach is what markers mean by questioning and critiquing in their feedback and what contributes to the critical thinking element required for a pass)
Glad you are finding the work interesting (that is the main reason I recommend students don’t choose T8 as although other topics may be more challenging to do they are often more interesting and exciting). It is also encouraging for other students when they see someone has deviated from choosing T8 as they then realise that possibly they could do a different topic.
(Be careful about information overload – be selective in what you read – I know research is the exciting bit 😀 but you have a VERY limited time to get your work completed!! )
May 2, 2015 at 1:36 pm #243649
Those were meant to be exclamation marks !!!!!
I also put a smiley face… it must have wondered off.
As you can tell Im more excited about my challenge. With the help of dedicated people like you I think more students will overcome the fear of doing the not so common topics. You really made doing this topic worthwhile.
Now I just want to pass to make you proud ????
Am I allowed to mention you in my skills and learning statement. I really would because I came so close to dropping this topic and doing topic 8 which would have meant deferring to period 31.
I cant thank you enough.
May 2, 2015 at 3:39 pm #243658
@ruva – There is only one little problem that has occurred to me as I have re-read our exchange and that is that the merger took place 9 years ago. That does not mean your work is invalid but you will have to show that you have incorporated some recent research into your findings. One of the problems universities face is students recycling other students’ work. ( I suspect this is the main reason why OBU INSISTS that T8 RAPs have to use the most recent data) So a marker will raise the obvious question “why has this student chosen to do this when it happened so long ago?” – they may start to presume that you have got hold of work that had previously been submitted and have just updated this..
I don’t want to worry you unduly but I think you need to preempt this little problem by briefly covering it in your Part 1 and possibly in Part 2 stating the limitations of the data you have. You can also mention it in your SLS – how doing T8 wasn’t very inspiring and you wanted the challenge of doing a different topic. I think as long as you are able to show that the work is yours and you are using some current data you will be able to overcome any doubts that the markers may have. Obviously if you are able to show some continuous trends pre and post acquisition up to now it will really strengthen your standing on this. (It may also be useful to keep copies of some of your drafts so that should OBU need to question you about when your work was produced you can show them how you built it up). As I say don’t worry too much right now as you have your deadline to work to and it may be one of those things that may never happen anyway.
With the SLS you need to take the approach that up to now you have mainly been involved in studying and writing answers in exams but you have had to learn how to do an acceptable academic piece of work – which in itself is quite daunting. So think of all the new skills you had to acquire (among them the dreaded referencing 🙁 !!!!) – and how it has introduced you to how to research academic papers etc.but also say how your strengths are in financial management so you decided to draw on that. What they are really looking for is what life lessons and skills you learned and what you learned about yourself (including any personal weaknesses) and what may be useful to you in the future in both your career and in your social as well as professional interactions. You can certainly refer to Open Tuition (the actual questions in the SLS say mentor because OBU expects most of the guidance to come from the mentor but it is perfectly acceptable to seek advice from any source if it helps).
May 4, 2015 at 9:32 pm #244074
Thank you for highlighting that point.
Here’s what happened; the company Im doing my project on was acquired 8/9 years back in 2007 when it was making very healthy profits. Today the same company is on the verge of collapse. The reasons why are so F9 like and very interesting. My analysis is 3 years pre-acq i.e 2004, 2005, 2006. My post-acq is the 3 most recent years. My SWOT analysis will mainly rely on annual reports and articles from business websites. It will be pre-acq SWOT and current i.e where the company stands as of this year.
The time lapse will enable be to analyse the financial and operational consequences i.e to see if the acquisition was a success. Please correct me if Im wrong because I wrote that reason in my project.
I have to date collected and read over 120 articles and journal, though quite a number are reporting on the same story. I have a separate folder for the ones I will actually use in my project. I do not have a draft project because I was typing but I do have my rough notebook which concurs what is in my report, that I initially intended to do topic 8 until I discovered the company was acquired. Topic 8 wasnt going to work anyway because the company has been making losses for the past 3 years.
What came first…… the company. I had my own reasons for selecting it, then I chose the topic. It was after researching on the topic that I found it was not a common topic but that didnt matter because I wanted to tell the story of “my” ailing company.
Can I use my notebook, downloads, and print outs as proof that it was my own work.
You mentioned, on another forum, that using a diagram from the internet would be copywriting. I found a diagram showing the number of acquisitions in the country of the acquired company. What if I create my own graph to represent the same data, how do I then reference it. Do I reference the graph or the page where I got it from.
Thank you once again for your support and advice.
May 4, 2015 at 11:10 pm #244081
@ruva – I am much reassured by your comments – it sounds quite logical now that you have set it out and the time lapse as you explain it makes perfect sense. I think you put some of this briefly in Part 1 but just as ‘an insurance policy’ (just in case you get a ‘hard’ marker ) you do a special Appendix and explain you have produced this Appendix with more details relating to your choice in case OBU is concerned that this might not be your original work. However I think you will be all right.
(You can upload at least 6 appendices – probably nearer 10 other documents – in addition to the mandatory report, SLS, Presentation, Ref List and spreadsheet). Just call it something like “Background to choosing this Topic and Company’ – then you can go into more detail about how you were going to do T8 without it all affecting the word count. BTW If you still have your comparator information keep hold of it along with all your other preparatory work but as I say I would hope now there will be no problem – but forewarned is always forearmed!).
All of this though does make for some good self-reflection for the SLS, as in effect you did some of this in deciding to reject T8! With Q2 you need to consider the difficulties in achieving your report objectives, how you overcame them, what proved to be your strengths and what you might have done better with the benefit of hindsight (you can also mention how much effort you wasted on doing the comparator analysis!). Q3 you can mention communications on OT as an example of part of your effective communication and how by asking relevant questions you realised that you might be able to do T19, which you thought would be far more stimulating etc. With the SLS apparently the markers like comments that demonstrate the trials and tribulations of producing the RAP as they know that everything does not always go smoothly, or to plan and that too many students produce anodyne formulaic statements that just do not ring true…
Regarding your query with the diagram – yes technically there is a copyright issue but to be honest as you are not intending to profit financially from incorporating the diagram, provided you acknowledge its source I wouldn’t worry too much. Most writers only get upset if someone is using their original work passing it off as their own and/or making money out of it. In addition in academic circles it is accepted that provided everything is referenced in this regard it is acceptable for educational purposes 🙂
I think it sounds as if you have the makings of a very good RAP. As long as your analysis is good, I have high hopes for you, so may your efforts be well rewarded! 😀
PS You should keep a couple of copies of your work (preferably on different memory sticks in case your files get corrupted)
May 9, 2015 at 12:47 pm #244931
Thank you for that wonderful advice.
Sorry Ive just been a little busy. Im almost done with my project and Im now considering the submission part. I have posted my query about my mentor’s on the “Queries related to Mentors and Mentoring” forum.
I used a model and reproduced a replica of the Kaplan textbook diagram. Should I mention that its my own “drawing” of the Kaplan diagram or I should reference the Kaplan diagram? I hope my question makes sense.
May 10, 2015 at 5:12 pm #245137
@ruva – regarding your diagram – what I have done in a similar situation is written in brackets after the title or underneath where the reference would go something along the lines of this: (Author’s diagram after Kaplan, 2013) and then in the reference list would put Kaplan (2013) and give the original source details . The normal referencing rules apply e.g. if you have more than one reference for Kaplan 2013, then you would need to put Kaplan, 2013a or Kaplan, 2013b etc. to distinguish the different articles – or put page numbers in the text reference (Kaplan, 2013 p.57) if citing from a thick study manual.
One final bit of advice – just ensure in your evaluation section that you are not just describing the situation as you found it, but remember the important thing is to discuss the implications of what you found supported by examples as evidence with appropriate references. The amount of your original thought/input and this type of critical evaluation will be what decides the grade.
May 25, 2015 at 9:03 pm #248993
Good evening Trephena,
THANK YOU SO MUCH FOR YOUR HELP.
I managed to submit. Hope all goes well.
Thank you so so much.
September 29, 2015 at 6:38 pm #274138
I am quite new here and have just commenced my RAP topic 19. I will need the support of everyone to come through with the project once and for all.
September 29, 2015 at 7:33 pm #274147
Hi Ruva/ Trephena
I have read through your earlier conversation. On business model, would it be fine to use CAMEL: A bank analysis model used by regulators for assessing the financial performance of the group pre and post acquisition.
Also I intend include McKinsey’s biz model for the analysis of the operational consequences of the acquisition.
Does the two models make sense please?
September 30, 2015 at 6:28 pm #274341
@olayinkaolawales – in principle yes the CAMELS model is appropriate if you can apply it well both pre and post – make sure you label them up clearly accordingly. And yes McKinsey if you think you have the information to apply it. Otherwise you can fall back on the stock SWOT model as it tends to cover everything e.g. what the merger /acquisition achieved (provided it was successful) in terms of strengths and opportunitie etc.
Congratulations for considering an ‘alternative’ Topic to T8! 🙂
September 30, 2015 at 7:34 pm #274345
Thank you Traphena. I will keep you informed of the progress of my RAP. I hope to complete the report mid next month to allow for detailed review and editing.
December 20, 2015 at 11:42 am #292261
I had a quick question and was hoping you might be able to help.
I was looking to write about the Bank of America Merrill Lynch merger for my RAP. Would this be a suitable topic to write about?
I have found quite a bit of information online, but a year before Bank of America bought Merrill Lynch, they also bought Countrywide. Would it be too difficult to identify the financial consequences of the Merrill Lynch acquisition, given the Countrywide acquisition’s impact on the financial statements?
Thanks in advance for any help!
December 20, 2015 at 9:50 pm #292292
@Sam – This would probably make a good project if you approach it well (read all of my posts to ruva above as s/he came back and confirmed that they passed at their first attempt.with this topic).
It will be a bit more challenging because of the Companywide issue but that does not make it impossible it just introduces another facet that you will need to factor in. If you think the addition of this company to the ML portfolio was complementary and beneficial then you can explore this briefly (or conversely if you think this was disadvantageous as a business decision) . Discuss it and also you may need to discuss its implications on the ML pre-merger figures and mention any specific consequences of it for BoA post main merger.
Basically however you need to focus in your main analysis on the impact of the principal acquisition and do a rounded evaluation so as long as you approach this logically and clearly so that the marker can follow your approach then it should be fine. You may find that the best approach in this sense is to make full use of Appendices and show your workings clearly in there and bring them in and cross refer as appropriate. So when it comes to Countrywide’s figures, you need to bring in just enough but not too much intricate detail so that it does not detract too much from the main issue of BoA and ML (In this sense Countrywide is a side issue, though an important side issue).
December 21, 2015 at 6:22 am #292306
Thank you very much for your help, I really appreciate it!
January 2, 2016 at 12:07 am #293191alifarooq35Member
Hope you are doing well.
I highly recommend topic 8 and 19 to students. This is an interesting topic to select. If you want to secure your good grade, do hard and smart job and get professional mentor guidance which can help you to achieve your desired grade.
Here is my professional advise for topic 19, Your primary objective of your project must assess the performance of the company whether it has improved or declined after the acquisition and to assess the overall impact the acquisition had on the company and other stakeholders.
Following are the main objectives of your research.
1) Financial impact
2) Operational consequences
3) Organizational structure and culture
4) Legal and regulatory issues
Your research questions should be following:
1) The motivating factors for the acquirers which led to the acquisition?
2) Is the organization benefited by the affect of synergy?
3) Overall pros and cons that came into view by the acquisition?
4) What are the financial consequences of the acquisition on the organization?
5) What are the operational consequences of the acquisition on the organization?
Hope the answer of the question.
ALI FAROOQ – ACCA Member & OBU Registered Mentor
February 9, 2016 at 5:22 pm #299844rydhu19Member
I am a student currently studying part time and I wish to do my OBU Project this year. I have chosen to go forward with Topic 19. As such I have done some reading and narrowed down my choices of companies. Before proceeding I checked whether the companies follow IFRS or U.S. GAAP.
As I am a student who has so far studied and followed IFRS’s, I was wondering if there would be any roadblocks or difficulties that I possibly might face if I decide to do my project on a company who prepares the Financial Statements according to U.S. GAAP.
February 9, 2016 at 7:32 pm #299860alifarooq35Member
If you have chosen topic 19, I can suggest you the following companies. You should develop your research skills to gather relevant information for your topic. Your mentor guide you how to create research skills.
The following companies led the mergers and acquisitions charge in 2014 in the USA.
1) Novartis AG and GlaxoSmithKline
2) Facebook Inc and WhatsApp
3) Actavis and Forest Laboratories
4) Reynolds American, Inc. and Lorillard Inc.
5) Halliburton Company and Baker Hughes Incorporated
6) Medtronic, Inc. and Covidien
7) Actavis and Allergan
8) AT&T Inc. and DirecTV
9) Comcast Corporation and Time Warner Cable Inc
You will find pre-acquisition and post-acquisition annual reports and other specific reports on merger and acquisition matter, I believe you will not be in trouble.
Here are some helpful tips for topic 19, you will have to evaluate the following issues:
1) Financial impact
2) Operational consequences
3) Organizational structure and culture
4) Legal and regulatory issues
You should bring all issues to the attention of your project Mentor and get his/her valuable advise.
OBU Registered Mentor
February 9, 2016 at 10:13 pm #299871hammadahmedqureshiMember
There is no issue of financial reporting framework used by companies with regards to any topic in BSc Info Pack.
Please read below guidance of chosing topic 19:
Financial & Operational Consequences of Merger
“An analysis and evaluation of the financial and operational consequences of a merger between two organisations or of the acquisition of one organization by another” .
The Topic and its Significance:
The Topic focus on two key main issues:
Merger occurs when two organization agree to go forward as a single entity rather than two distinct organizations. ?Merger occurs for various reasons, such as to stay in the competition, to recognize synergies, to enter a new market and so on.
In this topic, you will be evaluating the consequences of a merger or acquisition. You will basically identify the Financial and Operational benefits or consequences of the merger. ACCA Papers such as F7, F9, P2, P3, and P4 will come in handy, as well as guidance obtained from our professional mentors. Models will depend on the organization you have chosen and how the merger/acquisition occurred. Examples of models could be the SAF model or the Management buyout model.
Should I choose this Topic?
Decision of selection will be based on three things:
1. Topic itself
3. Availability of Information
This topic is suitable for students with good grip on the details of acquisition or merger. You need to know why companies merge, how does it benefit to them, how are the stakeholders affected and so on.
You won’t find a lot of organization with a merger or acquisition in their history. However, quite a few are available. Some mergers and acquisition were greatly publicized, such as the well known RBS and Faysal Bank merger in Pakistan. However, you need to make sure that you find a merger with commercial sense on which you can obtain enough information for preparing a balanced RAP.
This should not be a serious issue if you choose a company under public scrutiny. Mergers and acquisition are usually publicized, mostly on newspapers where they are legally required to state if they are planning a merger or when they acquire a target. As have been mentioned frequently, you need to write at least 5,500 words on evaluation and analysis in this topic and that entails that you need a lot of information to make an effective RAP.
The topic can be?summarized?as:
“Choose if you have strong knowledge about the consequences of merger and you can get enough information through both primary and secondary research and also there are no confidentiality issues.”
Rest, if you go with topic please read below articles:
Hammad Ahmed Qureshi – OBU Registered Mentor.
June 15, 2016 at 9:51 am #323012dhameelolarMember
Hi Trephena, i’m about to start my project and i’m a bit stuck on how to proceed, i selected topic 19 on a recent acquisiton that happened in my country, i went through the obu forum and i couldn’t find a forum on topic 19, i would appreciate if you can provide guidance.
June 16, 2016 at 8:12 am #323134
I have managed to retrieve it for you. Please take a look at my posts to Ruva (who came back and told us they had passed) as they include a few important points.
Some of mentors have posted comments too which may be useful to you. (Note: I only offer advice on the Forum, I do not take on mentees).
July 22, 2016 at 8:25 am #328324PeggyMember
Hi, was wondering if it’s possible to attempt this topic without relying on primary information? i had facebook and whatsapp merger in mind.
July 22, 2016 at 12:06 pm #328360
Yes it is possible to do this using secondary data but as with all topics you must be aware that you must add your own original analysis, not just report what others have found. Students often do not really understand what this means but in a nutshell it entails doing more that just describing what went on. You will need to collect pre-and post data and analyse this. Clear objectives will help. Read up about the after effects of other mergers and consult Google Scholar to find some academic articles (often produced by reputable business schools). Get a good feel for the topic first, plan your objectives and read not just the posts on here but the article on evaluation and analysis on our homepage http://www.opentuition.com/obu
Work out how you will do some original analysis as that is the main reason why students tend to fail this topic. Once you get over that ‘problem’ like ruva, you stand a reasonable chance of pasding
July 29, 2016 at 5:09 am #330063PeggyMember
Hi, to start my project, i had gather information from web and found out as below:
Facebook had only disclosed whatsapp’s financial results for year 2013 and 2012. Does computing ratios based on 2 years sufficient?
I am confused whether the financial impact is on the acquirer or acquiree?
As the acquisition took place in 2014, i will not have any pre-acq financial results except for statistics on the annual user growth, monthly active user, usage ranking/mobile app ranking, and call/msg sent through whatsapp. Is this data valid for quantitative measure?
Part of the acquisition deal is for whatsapp to focus on growing users which does not contribute to Whatsapp’s revenue but for future synergies. And Whatsapp no longer charge subscription fees, so there is zero revenue contribute to Facebook. So does that mean ratios on revenue are not relevant?
For operational performance post-acq, Facebook acquisition had lead to numbers of improvements in Whatsapp’s features that give rise to the user growth.
There are several ways on how Facebook plans to monetize Whatsapp but those are not realized. Should i include the future forecast average revenue per user based on revenue opportunity?
Are balance scorecard and swot analysis appropriate business models?
Facebook has let Whatsapp to operate independently thus unlikely there is any culture crash.
Am i going to the right direction? Somehow i don’t think there are sufficient info on this acquisition. Do you think it is better to change the organisation?
July 29, 2016 at 8:11 am #330099
That sounds as if you have done some good work and are now in possession of a good overview of the business motive behind the acquisition. Hitherto I could only give general advice and that is to look at the pre-acquisition position and compare it to the post acquisition position mainly normally just in financial terms and effect on staff (e.g. where a larger company acquires a smaller company in the same line of business it may be because it wants a larger geographic coverage but there may be say with retail, a duplication of stores and some job losses).
However this is a more interesting scenario with the companies you have chosen which will allow you to focus on the many aspects of the synergies and discuss these.
So set out the position of FB for a few years before – as you suggest- its revenue growth (look to see if this was ‘plateau-ing’ or slowing down) You might do the same for Whatsapp and bring in the other stats you mention above. You could also look at FB’s share price and dividends (if Whatsapp was listed you could do the same) and increases in subscribers. (I would have thought you might have been able to get the financials for FB going back to the time it floated)
At this point present some nice clear graphs and charts for most of this (students just seem to overlook how this helps the reader see the position instantly -and the markers love seeing rather than having to read figures) with just the basic explanations to set the scene and paint a clear picture.
Then consider the reasons for the strategic decision by FB to acquire WA and as you say this also involved the synergies. So focus on these synergies. Look at the financial deal for the owners/shareholders of WA -were they bought out of given FB shares?
Post acquisition focus mainly on the acquirer’s financials but you could also see if there has been much impact on WA as a separate entity. See and discuss what has happened with regard to all the pre acquisition trends that you previously identified
I think you could do a sort of SWOT analysis -say of both companies preaquisition or if that is not possible at least the strengths & weaknesses of WA and perhaps the full SWOT for FB and then compare it with the current post-acquisition position. If you have the info you could do a balanced scorecard or otherwise you might do a sort of application of Mendelow’s matrix and consider how the acquisition has impacted on FB s stakeholders.
Your Conclusion should draw all the major threads together and link back to your stated objectives
Provided you have the info I have outlined I think you would have sufficient to fulfil the RAP objectives and your application of the models is your contribution to the original analysis requirements.
September 15, 2016 at 9:14 am #340645
Thank you all for your help before.
The new RAP guidance is out and you must now choose a merger or acquisition which is not more than three submission periods ago, so that for period 33, the merger must have taken place after November 2013. I now need to restart my project, as i had written about a merger from 2009!
So a couple quick questions:
– As the merger is so recent, can I write about the likely consequences? i.e. the management team of the combined company is predominantly from the acquiring company, therefore the likely consequences are for the acquiring company’s culture to prevail?
– For the financial consequence, can I write about the transfer of value resulting from too high a purchase price? Or is this too loose a financial consequence?
Thanks again for your help!
September 15, 2016 at 7:11 pm #340670
@Sam the new rules actually relate to YEARS not submission periods and state:
“For all topics other than 8 and 15, please also note the requirement to base your project on recent organisational activity or processes rather than historical events. (For this purpose ‘historical’ refers to activity that took place more than the three full calendar years preceding the start of the current submission period.)
For example if you were proposing to submit a project in May 2017 for topic 19 the merger or acquisition would have to have taken place AFTER 1 JANUARY 2014”
Obviously in your case your merger is from a much older period. If you had already started your report and done a lot of work I think there is a case for you to write to OBU and show them that you had already been working on your report and now this means that you have been unexpectedly disadvantaged by an unexpected change in the rules. (I understand one of the reasons for insisting on recent work is that there have been attempts by some students to use passed work from years back and ‘recycle’ it. This new rule limits the potential for this)
September 18, 2016 at 10:38 am #340834
I did email OB and explain the situation a couple of times, and they have confirmed that they will not make an exception for me. At least I spotted this change now so at least I still have time to make the Period 33 submission dates!
You are very knowledgeable on this topic, I was wondering if you had any thoughts on my questions above? The difficulty is that with such recent acquisitions, I feel that there hasn’t been much chance for the merger/acquisition to have had a significant effect on culture.
September 20, 2016 at 6:15 pm #341056
@sam – I tend to agree with you that the fallout and effects of a merger/acquisition tend to take longer than 3 years before they are reported on/ picked up by outsiders external to the organisation.
You mention ‘culture’ and I imagine you mean organisational culture. However culture can also be an issue if the two organisations are cross-border / international e.g. the Kraft takeover of Cadbury had a serious impact on the not just the workforce but also shocked the UK public generally in how little consideration was given to employees and how promises made were so quickly broken.
I suggest that if you do some research on corporate mergers and acquisitions on Google Scholar you may turn up some articles that may give you some ideas to explore further. With Google Scholar you will find that some of the articles are only available by subscription, however those with a link showing on the right are usually able to be downlo0aded free of charge. By using a few key words (e.g. ‘company merger issues’) you should be able uncover some interesting papers and articles to help you develop your report and therefore help strengthen your analysis.
December 18, 2016 at 7:49 am #363921Flowergirl95Participant
Hi, I plan to do my OBU for May2017 and I’ve chosen topic 19.
My mentor advised me to pick out companies with no subsidiaries before the acquisition took place as its easier to analyse the financial statements and that the acquisition should have taken place after 2012. In all honesty, I’m struggling to find an M&A like that.
I need advice on which companies I could use. Thanks =P
March 27, 2017 at 8:58 am #379345eateMember
Hi, i have also chosen topic 19, I want to confirm that the merger and acquisition can be failure too..so opting any company which got their M & A not successful is it ok!
kindly reply me ASAP
March 27, 2017 at 9:58 am #379352
Yes not a problem. Follow the usual outline of setting out what was expected and then analysing and evaluating the consequences.
The only issue to check is whether your timeline accords with OBU rules. If you have read through this thread you will have seen that OBU was insisting on data no more that 3 years old. This becomes impractical with this topic as the full fallout sometimes isn’t apparent for about 5 years. I think protests were raised about this and OBU has dropped the idea but just check before you invest your time.
October 3, 2017 at 9:34 pm #409362
I am ACCA affiliate having completed all 14 examinations and now I have chosen to do topic 19 for my RAP. I have to say that i have found quite useful information on this forum but i would like some further help if i am to pursue this topic further.
I am aware that a natural way to tackle this topic would be to by analysing pre and post acq position of the acquirer, however, i have chosen an acquisition that was finalised in December last year therefore i am only left with 10-11 months post acq period.
Can i set the objectives such that this post acq period is not a problem?
October 3, 2017 at 9:35 pm #409363
any help would be much appreciated.
October 8, 2017 at 9:51 am #409835
@ashir – the key question you need to ask yourself is ‘Is there sufficient material for me to do a proper analysis?’
As I point out in my article on evaluation and analysis on our homepage http://www.opentuition.com/obu you have to do more than just report findings (as this would really only be doing a research project and you are tasked with doing a research and ANALYSIS project).
Normally several years figures allow for some analysis of the post acquisition position. So if you don’t have these you will have to establish what are you going to do some original analysis on?
October 17, 2017 at 7:10 pm #412190
Thank you for your reply.
My RAP is based on the Acquisition of LinkedIn by Microsoft, with Microsoft being the focus of the project. I have the availability of Microsoft’s 2017 Annual report and Financial statements for post-acq period. I have been working on developing the framework for the project and after some research this is what I have come up with.
Overall framework is as follows:
I am going to analyse the key factors/ drivers that led to the acquisition by using PESTLE or ‘forcefield analysis’ as my business models.
Further I am going to analyse the key financial implications (short and long term) on Microsoft as a result of this acquisition by using the following methods:
1. Ratio analysis;
• LinkedIn’s gross profit margins and asset turnover (for revenue analysis) figures (comparing the pre and post acq figures) and as a result what it means and has meant for Microsoft
• Microsoft’s gearing ratio- as debt finance has been used for the acq hence this ratio has gone up. Again what it means for Microsoft
• Share price (EPS) variations of both the companies, pre and post acq. Impacts on Investor confidence and later for Microsoft.
2. Microsoft’s WACC calculation. Analysis of pre and post acq. How has the deal benefited M’s financial position and what are the long term consequences.
3. Tax Implications:
• Tax savings for Microsoft as a result of using debt finance, as the interest payments are tax deductible- quantifying the value to attain future tax savings
• Microsoft can set off L’s Operational losses against future profits- quantifying the value by projecting future revenues and costs. What impact will that have on the tax rates and effective tax rates that Microsoft pays in corporation tax.
And as for operational consequences:
1. Business operational synergies-
• LinkedIn data has detailed information in relation to education, employment history and who do they know.
• analysis of LinkedIn’s growth in the number of users and how Microsoft is having and can have an advantage.
2. Microsoft’s marketing strategy- M plans to use L to target the professionals and executives in the market to prop up office 365
3. Competitiveness- salesforce (also offers CRM) , aligning LinkedIn database with’Microsoft’s Dynamics CRM’ to prop up the revenue from Dynamics by targeting the executives
4. Cultural analysis- future potential clashes and reasoning for it.
I am not sure what else I could take into account for operational consequences, however, I do want to add to it.
I want to do a SWOT analysis of the acquisition deal. I am planning to this by pulling threads from financial results into the analysis along with highlighting the operational consequences.
I would highly appreciate if you could take some time out to review and let me know if I am on the track. I have read the Analysis and Evaluation articles and they have been helpful in the preparation so far however, i am not sure if the above would constitute as any original analysis.
October 17, 2017 at 11:13 pm #412210
You have obviously thought about the topic and you have some sound ideas and your suggestions for analysis seem quite reasonable. What you are proposing to analyse would constitute original analysis as you will be doing some of the calculations yourself and considering the various financial impacts yourself (supported where appropriate by referenced articles I trust).
You might also be able to do some analysis of the impact on the various stakeholder groups (employees, shareholders, customers) . This would allow you to apply a stakeholder model. You have suggested using Forcefield analysis, PEST and a SWOT so don’t worry if you don’t have sufficient words for yet another model – I mention it merely because some markers are mad about models!
As always I suggest that you use clear graphs to present the findings visually where this is feasible. This then means that you don’t need to repeat and waste words in telling the reader what they can already see from the graphs/ charts. Visual graphics help break up the text and make work more interesting if used appropriately (although some Far Eastern students go over the top and include lots of pictures!). So good relevant graphs and charts are a very sensible idea (however for anyone reading who may have crammed lots of photos and pictures in their report – your work will appear tacky and unprofessional – academic work is about factual information and not about producing something like a children’s picture book which it will not impress the academic markers).
November 5, 2017 at 12:38 pm #414424
I hope you are well. I have been trying to make a logical structure of the RAP, however this topic is proving to be more difficult than I expected and to top all that my mentor has been of very little help.
After careful consideration and a bit of more research I have decided to approach the topic a little differently now and would highly appreciate your input. I understand that the ACCA average contributes towards the class of the degree and my average is such that I will only be able to achieve a 2:2 irrespective of the grade I score in the RAP and given the time constraint I feel I will be lucky if I even score a C and pass. Thus, keeping all of that in mind I am trying to keep it as least complicated as possible.
Following is what I plan to do now: I have stated the project objectives followed by the research questions and the approach that I plan to take to answer those questions.
Project objectives & Research Questions
1. Objective: To develop an understanding of the drivers that led to the acquisition of LinkedIn by Microsoft.
1.a. What is Microsoft’s corporate strategy how does LinkedIn fit into Microsoft’s strategic business?
This question will be answered by analysing Microsoft’s corporate strategy to understand what it was 3 years ago and how it has evolved over time. Thus, developing an understanding of how LinkedIn fit into the strategy.
– **[ I want to use business model, but don’t know which would suit the best, to cover the above approach to answer the question. If you could please help. ]**
1.b. why did LinkedIn agree to the acquisition?
This question can be answered by performing a pre-acq SWOT analysis of LinkedIn’s business position, which would provide with reasons as to how MSFT has the capabilities to be able to minimise the threats and overcome weaknesses of LKND and help it build on its strengths and realise the opportunities.
2. Objective: To determine whether the acquisition has strengthened the overall business and strategic position of Microsoft (MSFT) and set it on the path to realise its Corporate strategy.
2.a. How much have LinkedIn’s business operations grown and what contributions have been made to Microsoft as a result?
This will be answered by analysing the growth in the business operations of LinkedIn comparing pre and post acquisition position
– User growth? Monthly active users? etc
– Financial Analysis of revenue, cost and profit per segment on quarterly basis hence identifying trends: segments [Talent solutions, Marketing solutions & Premium subscription (including sales navigator- *this compliments CRM)]
– See if there has been growth in these segments, if so how has it been achieved? By minimising threats and maximised opportunity.
– projecting future growth in these variables, along with operational synergies that could be generated to improve these variables.
2.b. what are impacts on Microsoft’s of this acquisition deal?
This question will be answered by evaluating the impact of the deal on msft [(financial and non-financial) comparing with the pre acq positions] and the returns made on investment so far.
– financed by debt – gearing and interest cover ratios [ comparison with previous year and industry avg] , Dividend payments ( if more cash is needed to pay interest then less is available for dividends)
– Share price of the msft? EPS
– CASHFLOWS situation. Lknd and msft
– the acquisition has increased MSFT Market capitalisation
– Analysis of asset turnover, return on investment (ROI) on investment of ($26bn paid for acq)
– sustainable competitive advantage in relation to ‘dynamics CRM and office 365’ – (as the data acquired from LKND is unique) analyse the growth in CRM market share of msft since acq.
– Stakeholder situation can be analysed (particularly in the light of the acquisition) by applying Mendlow’s Matrix.
The results from 2.a and 2.b can be consolidated to reach a conclusion to satisfy objective 2. Thus also providing recommendations on the basis of the findings as to what course of action can be taken by msft to realise the strategic objective (found in 1.a) behind the acqiuistion of Lknd.
I have excluded the WACC, as I could not come up with suitable analysis on the basis of that calculation, other than company’s or target’s valuation, which was making things complicated. I have also excluded the tax implications of LKND operational losses as I am not entirely aware of the US tax laws to be able to calculate the figures.
If I can pursue the topic further in order achieve a pass by excluding some of the above information and add something else instead or rearranging/restructuring the information in any way or optimise the use of the business models (as i only passed p3 on the dot- 50%) please do state as I still have to type the whole RAP and have only got 10 days to go. However, I do have most of the info mentioned and have an idea of providing sensible commentary and analysis as well as no commitments till deadline.
I can totally understand if asking for a detailed feedback on the above would be too much to ask but you are the only source of validation left at this point and I am sure whatever you contribute can be relied upon. I would very much appreciate your valuable insight towards securing a pass. Please help me out with what you can i will start the typing process from tomorrow hopefully.
Thank you for reading the whole mess and for your input in advance.
November 5, 2017 at 8:12 pm #414463
@ashir -well done you for tackling a topic with minimum help. It is a shame that you can only get a 2.2 max but you certainly seem to be packing a punch with your proposals above.
If you can do all of that I think you should be fine. A main concern though is the word limit – as I think you will run out of words – so use graphs and charts wherever you can and don’t waste words repeating everything the graph already shows (just only mention those figures that are significant)
You asked about a model in your first paragraph. You have a few already including ‘Synergies’ (which you mention later). You could outline a few expected synergies and then assess whether they materialised.
I can’t really add much. Don’t overlook the SLS and Presentation and if in doubt about referencing consult our Ultimate Guide on our homepage. Good luck! 😀
November 6, 2017 at 10:04 pm #414610
Thank you so much for your prompt reply! Your validation has restored my confidence and I feel that I can complete the project on this topic and hopefully finally obtain the OBU BSc degree.
However, as I have been typing the RAP I have noticed the stress my overall objectives place on the corporate strategy of the acquirer and then I thought if I could have just done a topic involving an analysis of a strategy of a company so I just went through the topic list again and realised that there is such a topic, topic 14. Hence, I am a bit concerned if I am deviating from the original requirement of the topic 19 by any chance?
Another aspect I wanted to gain some insight on, if possible, was the appendices and list of references. They are a part of the same document as the Research Report? If so then do I have to include the excel spreadsheet, with all the formulae intact, at the end of the research report document as an appendix? (which I don’t think I know how to but I ll find out).
Also, the slides of the presentation will be copied from power point to SLS word document?
Therefore, in total I only have to upload two Word documents??
Thank you once again for the feedback, it has honestly helped me a lot, I am very grateful ?
November 7, 2017 at 8:39 am #414629
Interesting question as some of the Topic titles and/or some of the circumstances overlap so it is not always clear cut. Hard for me to tell you what to go for but my ideas on the two are as follows:
I feel with T14 there needs to be some sort of cost benefit analysis as the main focus of the analysis. Often it relates to a firm investing in a new product or market or a combination of the two. The best one I saw (the student worked for the company and so had access to all the background and data), was about Landrover’s decision to invest in an entirely new car (the Evoque) to both update its range and steal customers away from BMW and Audi. The success of this strategic decision even surprised the company!
With T19 the objectives are broader in that synergies come into play the new whole expecting to be more than sum of the 2 parts. The benefits extending to access to a different and/or wider market, increased market share, economies of scale, new expertise and competencies and of course profit maximization. The down side might be the fall out on the culture, staff uncertainty because of restructuring etc.
Unless you really want to annoy the marker do not load ANYTHING after the Conclusions and Recommendations in your report. For a start it messes up the automatic word count and any appendices in the same file would mean they would have to keep scrolling back and forth (rather than simply just switch between windows). Anything which causes them inconvenience is not going to endear you to them! You load the rest as individual separate files including the Excel file used for graphics and calculations, separate ref list and one for appendices (combined if poss for appendices because again a file for each appendix would both take time for the marker to open and drive them nuts!)
November 8, 2017 at 7:44 pm #414910
Thank you for clearing all that out for me. I will try and focus on the synergistic benefits that were expected, what is generated so far and what can be achieved.
One last thing I wanted to ask was that all the information flow is going to be in part 3, right? And that I need to reference the information gathered (facts and numbers) from the online articles, annual reports and any other sources that I have used?
Thank you for all your help once again, I have achieved better clarity than I had at any stage throughout the process of RAP. 😀
November 9, 2017 at 7:55 am #414921
Part 1 is an intro with objectives and research questions. Part 2 is about how you propose to go about it all and the limitations of the data and issues in that respect. Part 3 is about stating then analysing and evaluating what you found. Then you round off with conclusions which should summarise key findings and relate back to the initial objectives.
Every fact, opinion or the work of others needs to be referenced so see the OT Ultimate Guide to Referencing your RAP on our homepage as it particularly the Golden Rules are designed to iron out most problems
March 10, 2018 at 1:25 pm #442060
Hi, I have chosen topic 19 but I have a few questions/ clarifications and I would really appreciate your help.
For premerger analysis I plan to do a swot and financial analysis. can I focus the premerger analysis on the acquired company as I have not been able to get the acquirers financial statementsfor the years before the merger as the company was private before the merger and did not publish its financial statements.Reading through your replies to questions from other students you suggested that the swot should tie in with your financial analysis and ultimately help you meet your research objectives. one of my objectives was to determine why the acquirer acquired the target company but if I cannot perform premerger analysis on the acquiring company how do I meet that objective?
In addition to the swot and financial analysis I am considering doing either Johnson and scholes SFA model or Force field analysis. Can you tell me which of the two will be more appropriate. Will using only two business models make a good RAP?
With regards to operational consequences apart from reduction of head count and closing of less efficient facilities I’m not sure what else to add and I doubt that will be enough.Will you consider different management styles as a “culture” issue?
Thanks for the help
March 14, 2018 at 8:27 pm #442644
@imaan – my main concern is whether you will have adequate information to be able to do sufficient original analysis. In an ideal scenario you would be looking at the strategic reasons for the acquisition/merger and comparing post-merger/acquisition financials for the acquirer with their pre-acquisition financials (and the post HR, culture and other operational changes supplement this).
I don’t think the models on their own will be sufficient – it is not a case of using lots of models as it is normally better to use one or two well (rather than 3 or 4 superficially). Unless you can put up a good case of why the merger / acquisition strategy was undertaken and have sufficient information to assess its success (or otherwise) I don’t think this would end up being a successful project.
I am sorry if this is a disappointment, but really it is better to know this now rather than be disheartened and told your topic wasn’t really suitable in the marker feedback.
(If you are looking for a possible new topic then there should be plenty of material on Carillion for Topic 17 for a pass if you approach the topic appropriately)
March 15, 2018 at 10:11 am #442695
@traphena thanks for the feed back .i just want to give u a complete overview ofwhat I plan to do or have done so far as I feel that I did not explain myself well in my previous post.
I have done a full swot on both companies with which I plan to demonstrate suitability(from SFA model) of the decision. I mean that I have pointed out how one company’s strength can be used to overcome the others weakness or explore its opportunity.i also plan to use financial analysis to back the swot and sfa e.g. One of the strength of the acquired was high cash reserves(from cash flow statement) so this can be used to back an opportunity of doing more acquisitions on the swot and also feasibility (available resources) on the sfa
For “acceptability ” from sfa I plan to use mendelows matrix on stakeholders and analyze each category
I have written a section on the back ground of the merger where I explored the strategic reasons for the merger.two e.g. Are as follows:
1. Management expected synergies such as cost savings of 1.5 billion annually
2. The acquiring company planned to use its international presence to sell the targets company’s products
To analyze whether this was achieved i will take individual total cost for each company add them to get combined pre acquisition cost and then compare to the new company’s total expenses to see if the 1.5 expected savings was achieved.
I was able to get only 2015 financials for the acquiring company but that will give me two years results as it includes 2014 results but I will explain this as a limitation and why I only did pre merger financial analysis for only two years.
An issue I have is that I got the post merger annual reports from the security and exchange commission website submitted through form 10k which are supposed to be audited but it does not include an audit opinion so I’m not sure if it is audited or not.can I go ahead and use it?
For the international sales I plan to use the acquirers financials (segment reports)to see if the percentage of sales oversees has increased or decreased compared to premerger.
For operational results as I said in my previous email there have been some redundancies and closing of facilities.this I plan to analyze using the financials coz it has no of processing facilities and workers.i also have backings for this through analyst reports and news articles.
For culture the only thing I could think about is that the acquired company has a very hard approach to cost cutting and for e.g. There executives even fly coach so I was thinking this will affect the acquired company’s staff. They also implemented zero based budgeting which is new to the acquired company.
In summary I plan to use three models swot,sfa and mm plus financial ratios.
do you still think I’m not on the right track ? Have I completely misunderstood what I’m supposed to do?
please let me know what you think. i have done a lot of work and if I change topic I don’t think I will be able to submit in may with all my other commitments.
Thanks for the help
March 16, 2018 at 7:11 am #442766
Forgot to add…I have also assessed pre merger trends eg sales growth rate etc for the acquiring company and computed some ratios .i plan to do the same for post merger results .please reply ASAP.thanks again
March 16, 2018 at 6:40 pm #442811
@imaan From your first post it looked as if you hadn’t got much pre-merger information. However from what you have said subsequently it does sound as it you have acquired sufficient data and information for you to be able to do some original analysis of your own and produce a project that potentially would fulfil the assessment criteria and RAP requirements.
In fact you seem have a good understanding and grasped what is required with your plan to demonstrate strengths/ opportunity from the SWOT Outline the reasons for the merger/acquisition and identify the strategies and then go on to do analyse the subsequent position
The cost information and pre-merger sales information would be very useful for your analyais(do you have both companies figures for sales?). This and profit, gearing and share information would then allow you to make comparisons with the post merger situation as that in turn will help you form an opinion, backed up by evidence, of whether the merger / acquisition has been successful.
There is no problem using several models as long as they are ‘adding value’ in helping you build up a strong evaluation (sometimes students just put in lots of models that are not really making a valid contribution to advancing the analysis and end up being just a waste of words). Overall however you seem to be putting together a well thought through project and as long as you reference adequately and keep within the word count there is a good chance it will get a decent grade – so well done so far!
March 20, 2018 at 8:15 pm #443152
@ traphena thank you very much for the feedback. I am very grateful.i have an issue I need clarification on and will really appreciate your help.
The merger I’m basing the RAP on happened early to mid 2015 so my premerger years are 2012,2013 and 2014.however the acquiring company was itself acquired in mid 2013. As a result of the 2013 acquisition the company’s year end was changed by the new owners from April 30 to dec 31.the financials therefore include a full year 2012 result (ending 28 April 2013), 9 months results( 29th April-31 dec 2013) and full year 2014(Jan-dec 2014)
The nine months (2013 results) is known as the transition period which includes certain expenses relating specifically to the acquisition which I believe may distort the true picture of expenses trend
My question now is how do I compare like for like if 2013 has only 9 months results?do I improvise by doing an estimate of the fourth quarter based on the average of the 3 quarters and explain my limitation and why i had to improvise?
In relation to the acquisition expenses Should I adjust the reported expense amounts with the acquisition expenses to eliminate them in my analysis or include them as part of the reasons for the trends?
Thanks again for everything.you cannot imagine how much your feedback has helped me.
March 23, 2018 at 7:29 pm #443616sosokoMember
i have really found this forum helpful, i’m not clear on the requirement to base my project on recent organisational activity or processes rather than historical events. i want to do topic 19 and i’m intending to submit in November 2018, however the merger started in 2015 and the completed in mid 2016. Both companies reported separate financial statements for 2015. i have a good information of both pre-acquisition and post acquisition for both companies but before i proceed i want to know if this meets the recent activity.
March 24, 2018 at 10:14 pm #443700
@traphena I went through the financial statements again and I noted that to assess performance the p&l was restated after the year end change.it includes three p&l
The first one compares 2013 and 14 performance and the p&l was prepared for the 12 months period to 31 dec 2013/14(52 weeks )
The second compares 2013 and 2012 the p&l was prepared for the period April to dec 2012/13(34 weeks).
The third one is explained in my previous post
My question again is how do I establish the trend for three years when each was based on different period(lengths).
Do I show trend for each of the two periods separately and do my analysis separately as the company has done?I mean for eg do one graph showing 2013- 2014 and another showing 2013-2012 and do my analysis for each based on the periods ?
Or do I do one graph with all three results and one analysis (but in this case 2014,2013will be for 52 weeks while 2012 will be for 34 wks)
I don’t know if I make sense but I can send you the financials through email if you don’t mind looking at it so that you can understand what I’m trying to say if this post is not too clear.
April 9, 2018 at 6:06 am #445743
Apologies for the delay in responding – I have been away fir a couple of weeks.
You can turn everything into ratios using the figures from the reports you have as ratios obviate the need to do adjustments. Make it as simple and easy for yourself – by using ratios you should then be able to do line graphs from them giving you trend lines
April 17, 2018 at 9:15 pm #447841
Thank you for responding and for all the help. I don’t see how I could have come this far without this forum. I have a further clarification though.
In your response above I think you are saying the ratios obviate the need for adjustment. I don’t quite get it . For eg calculating the ratio I noted that for eg in calculating asset turnover using sales of 34 weeks( lower) gave a lower ratio as compared to using sales of 52 weeks( high amount).wont this distort my analysis?
Also in another forum you stated that it is better to discuss continuous trends eg 2012-2016 but in my case I haven’t done that because I thought comparing 52 weeks against 34 weeks will not be correct. I have compared 2014 vs 2013 and 2013 vs 2012. This resulted in using more words so I am desperate to rectify the situation if there is a better way out. Please respond and thanks again
April 18, 2018 at 8:57 am #447928
Yes I see the problem here as with asset turnover you are using P&L figures for 34 weeks and 52 weeks over the same balance sheet denominator. So no ratios won’t work in this scenario (however they would where you are using a denominator that similarly relates to P &L 34 weeks e.g. GP or NP.
Your only alternative is to priorate the P&L figures to turn them into 52 weeks if you really want to use balance sheet numbers as part of the ratio calculations.
Comments have be interpreted in the context given. Continuous trends would normally be appropriate for Topic 8 as business strategic decisions may affect more than one year. Mergers and acquisitions are extreme strategic decisions and in Topic 19 it is the effect of these specific decisions you need to evaluate. The consequences of a merger/ acquisition will impact on many areas of the business not just financial performance so the analysis needs to be as ‘holistic’ as possible.
I am not so sure how relevant comparing 2013 with 2012 is for a company being studied in 2018 so ask yourself (a) is this section adding value? Or (b) am I just including it because I am following a routine approach? Obviously if (b) chop it out.
April 19, 2018 at 1:43 am #448073
Hello Traphena, many thanks for your reply. The merger I’m basing the RAP on happened mid 2015 so my premerger years are 2012,2013,2014.I agree with you maybe I’m adopting a routine approach as I thought I need to do three years pre and post merger. I can exclude 2012/13 and explain why I excluded it ( the restatement for a shorter period ie34 weeks etc) as a limitation but wont I be penalized by the markers for not doing three years? Or do you think prorating is better as you also suggested?
Also I am really running low on word count so I was thinking of abbreviating some key words I have used a lot in the rap. eg the first time I mention Berkshire Hathaway I put (BH) in bracket and then write BH any other time I want to mention them. Is this okay?
Thanks a million. God bless you ma!
April 19, 2018 at 4:49 pm #448154
I think the post merger years are quite important as they help you to assess the success / issues / highlights and / or failure of the merger / acquisition whereas the pre-merger years merely indicate what may have led to the decision.
As always it Is original analysis and critical thought that will drive your grade.
You can always show the trendline for several years pre merger but don’t waste too many words other than state the case for the decision and the main factors behind it.
April 28, 2018 at 9:42 pm #449235
Thanks Traphena! think I get it now..one more question tho as I’m about to rap up.
In my ratio analysis when stating the reasons for the trends I’ve used words like “may ,could etc) eg the increase in sales may have been as a result of xxx.is this correct or should I state the reasons as facts like …the increase in sales was as a result of xxx? I think I read along those lines on someone’s marker feed back on the “marker speaks” forum but I can’t seem to be able to find the post anymore to clarify.thanks again for your invaluable input and help
April 29, 2018 at 11:57 pm #449396
Markers are a bit cagey about may have / could be etc. – they call it being ‘speculative’ and think you should do adequate research to come up with more definite reasons.
The Info pack is a guide. I always advise if short of words focus on the evaluation and analysis and cut out what is unnecessary in Parts 1 &2. If you can squeeze in some research questions it might be a good idea. The other area where words are wasted is repeating what every graph already depicts – it drives some markers nuts too apparently (and once on some feedback I actually read something like ” most of your commentary kept repeating percentages which, because I am not blind, I was perfectly capable of seeing for myself”)
April 28, 2018 at 9:56 pm #449238
Also do I need to follow the structure in the info pack?to save on word count I did not do research questions even tho I have research objectives.
Because I needed more words for the analysis section I did half of the recommended words for section 1 and 2.would I be penalised for this?
April 30, 2018 at 10:38 am #449453
Thanks very much for all d help.i will try to do a few research questions and also read through to ensure I’ve not made any of the mistakes u have highlighted.
October 21, 2018 at 11:20 am #479363mks2016Participant
how much is expected in terms of depth of analysis and content for the pre merger analysis. one year pre merger isn’t always enough to show trends. likewise there isn’t enough word count to analysis 3 years of pre merger and 3 post merger ?
October 21, 2018 at 7:02 pm #479395
Analysis and evaluation is the critical part of your report so you should ensure you reserve about 5,000 words for it. Wherever possible use graphs to illustrate trends, putting detailed calculations, tables and financial statements in the appendices.
Headings and sub-headings and a good structure will help you put your findings in a logical order. It is important that you do some original analysis of your own and not just describe what went on by analysing some key ratios and discussing implications and assessing whether the merger strategy was successful. As for depth – how long is a piece of string? As much as you can within the word count…..
December 3, 2018 at 2:35 am #486864
Hi, I have submitted topic 19 in Nov 2017 and failed but I have a few resubmission clarifications and I would really appreciate any kind of assistance
Below is my result breakdown.
• Understanding of accountancy / business models -Pass
• Application of accountancy / business models -pass
• Evaluation of information, analysis and conclusions –fail
There are very few references sources use in analysis
• Presentation of project findings –pass
Overall technical and professional skills -fail
• Communication –fail (grammar mistakes)
• Information gathering and referencing -fail (same reasons as above)
• Information technology –pass
Overall graduate skills –fail
Research Report Assessment –fail
• Self-reflection -pass
• Communication skills [in the presentation] –pass
1. Do I only need to resubmit the part failed or all the part including the previously passed?
2. My research was submitted 15 Nov 2017 & merger took place September 2014. Do I have to choose different company or can I still submit a revised copy of the same PR?
Or is there any exemptions to rules below?
“For example if you were proposing to submit a project in May 2019 for topic 19 the merger or acquisition would have to have taken place AFTER 1 JANUARY 2016”.
December 3, 2018 at 7:06 am #486882
Without seeing your work and the full marker feedback I can only comment generally. Evaluation, analysis and conclusions is the most frequently failed section followed by information gathering and referencing. Often this is because students describe what went on rather than discuss the implications, significance and effects of what has happened.
The other common error is to drown the marker in a ‘sea of numbers’. ( I always wished students would ask a friend or family member to read their work and ask the person if they struggled to make sense of it -honest opinion required -and thereby save themselves both the disappointment of failing and wasting GBP 340 on the submission fee). Believe me it is impossible to absorb masses of numbers at one sitting and often there is no point having them in the text when a graph will show the position as this can be assimilated far more easily than words (probably an evolutionary fact that visual information enters the brain much quicker because written language is comparatively a recent development)
However from your brief feedback comments it appears that you have not committed the above cardinal sins but simply made many statements that were unsupported by references and/or used an inadequate range of information sources. To remedy the former I suggest reading the Open Tuition Ultimate Guide to Referencing your RAP, which I helped to write, (on the OT OBU homepage). The idea was to break referencing down into simple rules that explain the logic. You should also try to find a few more sources to support your work (possibly the special search engine Google Scholar might help there).
Bad luck with the fail for (5) communication- this is a rarity but I suppose the argument is that it is supposed to be a semi-professional report and these days with grammar and spell check such mistakes are preventable – but anyway simple for you to remedy 🙂
To answer your specific questions:
1. No SLS or slides required for the resubmission but everything else is
2. You may resubmit using the same company – the rule you cite is for the first submission
Good luck with your work!
December 3, 2018 at 10:07 pm #487081
Thanks for your swift response @Gillian. I have not seen the full marker feedback as the submission portal is temporarily not working or allow students to log on. I was surprised with the fail for (5) communication but I guess that was due to over writing and had to cut back my word counts and maybe that disrupt the structure/language use in communication. Lesson learned.
I will be going through the “Open Tuition Guide to Referencing your RAP” once I am able to read the full feedback.
I am glad I can use the same company as that would give me time to properly revise my work.
Once again thank you for your reply I really appreciate @Gillian
December 4, 2018 at 12:23 pm #487170
That explains the fail for communication then -yes you more than likely exceeded the word count and I know some markers are very ‘hot’ on this. I remind my own mentees to ensure that they take account of the words in graphs and diagrams. EVEN IF the MS Word count is below 7,500 (I suggest never going above 7,400 to deal with this issue).
Another thing I always do is tell my mentees to trim out excess words in Parts 1 & 2 as the Findings, Analysis andEvaluation section is the one that will mainly dictate whether you pass or fail and the ultimate grade (for a first time submission)
You may try emailing firstname.lastname@example.org and politely request your feedback. Although the submission portal is down I understand from my contacts that some parts of the system are available to staff. If they have the time I am sure they will try to help you with this if you provide your full name, reg. No and inform them it was P35 and are using your registered email address. (Obviously for security and GDPR reasons they may need to ask security questions in addition) No promises but alternatively if you can mail me via my website i may be able to assist with this (a case of who I know!)
Note to others – unfortunately this is not a general invitation to the ‘world and his wife’ but specifically directed to meonline911
December 5, 2018 at 2:11 pm #487511
Thanks a lot @Gillian. I really appreciate your assistance. I have just emailed email@example.com to request for my full feedback with necessary information given and hopefully I would get that soon.
You are right about the word count @Gillian. I looked through my submitted copy last night and realised I could have reduced the word count in part 1 & 2 to accommodate my evaluation in part 3.
Also, the marker might be referring to lack of referencing in part 1 in relation to company background.
Thanks once again.
December 22, 2018 at 9:11 am #492490
Just a quick question and your contribution towards this would much appreciated.
Do still need to have mentor when re-submitting updated research report (RR)?
I am a bit confused about the requirement regarding this because i have passed SLS in my previous submission.
December 22, 2018 at 4:47 pm #492514
Just a quick question and your contribution towards this would much appreciated.
Do still need to have mentor or gives mentor details when re-submitting updated research report (RR)?
I am a bit confused about the requirement regarding this because i have passed SLS in my previous submission.
June 26, 2019 at 6:02 pm #521375
I am planning on submitting for the November 2018 period and have chosen topic 19. I am around 75% complete on my first draft of the RAP and wanted to show my structure/topics so far and ask if you believe I am covering enough areas. I understand they should match my project objectives, but having some assurance over if I am answering the overall topic would be of great help (for the evaluation/analysis section):
– Economies of scales – pre for both companies and post acq’ (utilising various formed graphs and drawing to conclusions and how the acq’ has helped this)
– Share price reaction of competitors as well as how announcement of acq’ impacted two companies pre/post
-Synergies – describing 3 main synergies as a result and have provide graphs/analysis into how these have/have not been achieved from the acquisition
– Cultural analysis pre acq for both companies and then how the acq has led to a clash of culture and the impacts of this etc (ie: poorer service, inefficiencies)
I also plan on adding:
– Competitiveness (how the acq’ of the company has aided the acquires competitiveness
– Profitability of the company pre/post as well as competitors reaction
– Rationale for acquisition and type of integration
Finally, I will ensure to incorporate SWOT/PEST models (I’m thinking SWOT to support rationale for acquisition) and PEST post acq
EDIT: I should note, due to the nature of the companies being so large, I have not been been able to obtain primary information since it would not be of use (sample would not represent any valid support/conclusions), I therefore stated this limitation in my RAP under section 2 and to get around this, instead of just citing sources, I obtained various historic data and statistics, and created my own analysis to support my claims.
Ie: I obtained all the reviews of a company from 2011-2019, broke them down by star rating and period and showed how from the acquisition, that customers reputation of the company has decreased
Essentially, I have used other peoples data (surveys etc) and formed my own analysis and drew additional conclusions to support what I have written. Is this a good work around?
June 26, 2019 at 7:09 pm #521379
Sorry, can I also say that a drawback is that since the acquisition, the acquired company results are consolidated into the parent, therefore I cannot specifically look into how the acquired company has performed since being acquired.
I was hoping the above points of focus and my analysis would be sufficient to assess this?
I have access to the pre acquisition financials of both and the post acquisition of the acquirer company.
What approach would you recommend in this instance?
Sorry for the bombardment of questions, but any assistance on these matters would really be greatly appreciated 🙂
June 27, 2019 at 10:50 am #521408
nathan488 – your approach sounds fine. Although you say you cannot look at the financials post merger because there is obviously only one set of financial statements now, you may be able to examine the trends in the figures in the light of the stated objectives of the acquisition (in fact possibly your section on synergies is already doing this?) So as long as there is evidence of what the acquisition has achieved (for better or worse) and analysis and evaluation of this for you to be able to form judgments then you should be on track.
Primary data is not essential but may be a useful add-on when a student has access to staff in the organisation to add some information on cultural aspects of the acquisition. In larger organisations either media articles and/or analyst reports will offer info on this (as in the case of the shameful takeover of Cadbury by Kraft).
A post hoc PEST is a very good idea
June 27, 2019 at 12:13 pm #521413
@trephena Firstly thank you for replying so promptly, it means a lot!
I like the idea of examining trends of the post-acq financials, I suppose my only worry was based on some of the earlier comments you raised in this forum that the examiner doesn’t like speculative answers and I feel if I said “x has increased…this shows the acq of the company was beneficial” etc – but this is better analysis of the financial position than none at all.
Yes I have tried to evidence as much as I can from a variety of sources to back up all my claims, so instead of just citing sources, I’ve found data, analysed it and provided graphs etc to support these points of view.
My companies were actually Amazon’s acquisition of Whole Foods
As a summary:
Economies of scale: WF’s struggled due to low no. stores, high prices to consumers – poor e.o.s
AMZN: Benefits big time from e.o.s due to size and scale and operating on “no profit model”
Post acq: AMZN can offer these e.o.s to WF’s and lower prices of WF’s to improve foot traffic and thus sales of WF’s and awareness
Supported by: I made various graphs of prices of WF’s pre/post acq and showed impact of prices pre/post and how after AMZN’s acquisition, they lowered proving AMZN has used its e.o.s to make an impact. Also added survey in which long term WF shoppers were asked if they’ve noticed any difference in price since AMZN acq
Share price reaction:
Share price and trade volume graphs of AMZN/WF’s during the week of acq showing a clear spike on date of announcement as well as graphs of competitors (walmart, costco etc) all which declined and commented why this was the case (AMZN’s threat of low margin model, big e.o.s, monopoly presence)
1) reduced shipping costs/logistics: previously, AMZN has faced increasing costs in this matter (shown by graph of amazons shipping costs 2016-2018 rising as well as becoming larger proportion of cost of sales and net margin analysis of all competitors and AMZN/WF’s)
Then stated how acq of WF’s lowers this due to 450 network/distribution centers from acquiring the stores and the amazon locker (customer go to WF’s to pick up amazon orders) – overall these factors mean costs should fall for AMZN versus no acq at all so synergy realised
2) Enhanced reputation/brand: pre acq: both companies have good brands etc
post acq: AMZN bought a physical presence as opposed to just online, so awareness increases, backed up by YouGov survey of customer perception of WF’s brand increasing since acq by AMZN and AMZN presence increased by selling AMZN products and prime deals in WF’s
3) Exploit/successfully enter into grocery market: pre-acq: AMZN tried numerous occassions and failed (backed up extracted customer reviews of AMZN Fresh showing increasing number of 1/2 star reviews year on year
Post acq: Point 2 above shows its got better but, I took customer reviews of whole foods and 1/2 star reviews of whole foods actually increased past acq date, showing maybe acq of whole foods isnt yet fully exploited and thus synergy maybe not realised
AMZN: customer focused, cost cutting, harsh treatment of workers
WF: Decentralised, autonomous employee decision making, high margin, high cost
Post acq: conflicts as reported workers being layed off, no decisions made and turning centralised etc – evaluating that clash of culture is limiting success of acq
SWOT analysis done for both companies pre acq and to link to rationale for acq
And then I need to do the remaining points.
Ironically, I’m going to go over my word count and after the first draft need to seriously tone down to keep within 7,500 due to having to include all the models
I apologise for stating so much in detail, but my concern is that I’m not answering enough points financially/operationally to warrant a pass or would you say from the above that my RAP sounds full enough/covers enough areas?
Many thanks in advance for all your assistance, my Mentor is away on Holiday and I am planning on finalising before I go away next week and this guidance is much appreciated.
June 28, 2019 at 5:17 pm #521471
I am nor surprised you have run out of words if you have included all of that!
Topic 19 is a balance between quantitative analysis and qualitative analysis – however the most important thing is that you show evidence of doing some analysis for youself and you seem to be doing that. In fact you have what sounds like a very good report so well done.
Where count is an issue I urge my own mentees to edit parts 1 & 2.
June 28, 2019 at 6:28 pm #521473
I am nor surprised you have run out of words if you have included all of that!
Topic 19 is a balance between quantitative analysis and qualitative analysis – however the most important thing is that you show evidence of doing some analysis for youself and you seem to be doing that. In fact you have what sounds like a very good report so well done.
Where count is an issue I urge my own mentees to edit parts 1 & 2.
Hi Gillian, firstly thank you for taking the time to review and respond to my concerns noted above, having some external perspective over my report has really helped assure me that I’m staying on the right track 🙂
I’m glad its a good mix between both quantitative/qualitative since I was worried the question focused too much on financial ratios pre/post.
Word count wise, I definitely could scope out paragraphs from my part 1/2 but unfortunately I’m currently on ~4,800 for part 3 and I assume although the overall limit is 7,500 that each part 1/2/3 has to be limited to the prescribed amounts (1,000,2,000,4,500)? It’s no worries as there is certainly some content I can rephrase/amend to reduce my words 🙂
Thank you again Gillian, your advice is most appreciated and I hope you have a lovely weekend!
June 28, 2019 at 9:20 pm #521486
Take it from me as a former marker that it is the overall word count only that is assessed.
I actually tell (yes tell!) my students that they plan 5,000 words for Part 3 and arrange the rest accordingly.
July 2, 2019 at 2:40 pm #521655
Take it from me as a former marker that it is the overall word count only that is assessed.
I actually tell (yes tell!) my students that they plan 5,000 words for Part 3 and arrange the rest accordingly.
@gillianm That’s great news to hear and will certainly ensure I have a broader range to cover all my points raised. Thanks for all your help on these matters!
October 12, 2019 at 1:02 pm #548894shreyapanickerParticipant
I have chosen this topic because i wanted to do something different from the topic 8 that all my teammates have chosen , I wanted to know if its really possible to pass this topic with only secondary sources of information.
Since i have chosen Amazon as my acquirer company, there are alot of information available and the result of the acquisition is not so great since it has been only 2 years now.
I have chosen SWOT , Force Field analysis and ratio analysis as my business models.
However i feel the models have repetitive conclusions , please help guide me!
October 30, 2019 at 7:18 am #551190
The focus probably should be on synergies. Consider the strengths and weaknesses of both companies and the advantages of combining these. In the financial analysis try to show whether there are signs of the synergies working (or not as the case maybe).
January 24, 2020 at 10:19 am #559809shreyapanickerParticipant
I dint submit my project due to fear, since the company I’ve chosen doesn’t have much details regarding the acquisition, especially because the acquired company isnt listed and so financial consequences are difficult to analyse.
I wanted to know if i can select M&As that have taken place before 3 years , for eg: 2015 acquisitions. Because i read that the companies must be chosen within a time frame of previous three years , but for acquisitions, the consequences will only be visible in the longer term , hence I find it difficult to select a company within the time frame of 3 years.
January 25, 2020 at 9:20 am #559849
The rules are quite strict and you should not deviate from them without seeking direct permission from the university.
I agree a 5 year time frame would be more realistic. All you can do is contact firstname.lastname@example.org and put a case forward for using a particular company and see if they grant permission for you to use that company if it is more than 3 years. Otherwise you will have to go with the prescribed requirement of 3 years or you risk an instant fail.
March 25, 2020 at 8:03 am #565728
Hi Trephena or Gillian.I have chosen topic 19 for my obu rap May 2020 submission.i have chosen the 2017 acquisition of Jimmy Choo by Michael Kors.im currently working on the analysis and evaluation part.for pre acq i will use 2016 n 2017 financials.post acq i will use 2018 n 2019.however,during f19 Michael Kors also acquired Versace.now i dont know how this can impact my evaluation of financial perfomance post acq as there is versace results in th consolidated financials.please assist.
I have chosen the Swot analysis as on of my business models. Im jus doing th swot analysis for th organisation in general irregardless of pre or post acq.i have also selected porters 5 force analysis inorder to assess th competitive advantage.
One of th reasons for acq of JC was For Mkh to have a balanced product portfolio so can I also use BCG matrix as a model to asses th product portfolio.
March 25, 2020 at 12:45 pm #565796
Hi Gillian.kindly assist with my questions above
March 30, 2020 at 1:30 pm #566150
@shelmonique – when there have been other acquisitions this can be a bit of problem. When it comes to sales if you have Versace figures for the 3 years prior to its acquisition you might by using regression analysis, be able to forecast what the trend in its sales was likely to be for V and deduct this from the MK group total sales after acqusition (adjusting for how many months V was part of the group)
A SWOT can be one of the models – it would be more appropriate to do this for Jimmy Choo as it would be more natural then to progress to the synergy analysis and why MK decided to acquire JC – probably because of JC’s strengths – one of top brands in the shoe market whereas MK’s strength was handbags, however the two products are complementary and some of the same suppliers could be used saving on costs for example, similar target market customer etc.
You might be able at the end to mention very briefly the Versace acquisition as this gives access to the designer clothes market
March 30, 2020 at 10:16 pm #566206
thank you Trephena for taking your time to answer me.another question that i have is this,aftr michael kors acquired jimmy choo it retained its name.but aftr it acquired Versace,it changed the group name to Capri Holdings.am i correct for ignoring the Capri and keep on using Michael Kors since im looking at the acquisition between michael kors and jimmy choo only
April 4, 2020 at 7:43 am #566464
Just stick with the main issue i.e. the acquisition of Jimmy Choo by Michael Kors. The change of name and restructuring to Capri Holdings was probably done for tax purposes. It is perhaps something to mention in passing but don’t get too distracted by it.
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