FINANCE SIMULATION: M&A IN WINE COUNTRY

DEBRIEF SLIDES
HBP PRODUCT NO. 4807

This PowerPoint presentation was prepared by Professor Timothy Luehrman for the sole purpose of aiding classroom instructors in the use of Finance Simulation: M&A in Wine
Country V2 (HBP No. 4805). HBP educational materials are developed solely as the basis for class discussion. These materials are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.
Copyright © 2013 President and Fellows of Harvard College. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business Publishing.

DOES M&A MAKE SENSE IN THIS …show more content…

 There is a lot of dispersion in your submitted reservation prices.
 Why? [Note that the confidential information was identical for each role]
 This dispersion makes the M&A outcome less predictable.
 In the real world, such dispersion may explain a “Winner’s Curse” in M&A

 There is an “own-firm” bias
 BV’s mean reservation price for itself is higher than the objective reservation price
 BV’s mean reservation price for SS is about the same as the objective reservation