Fiona looks back on the Frankfurt 'Mergers and Acquisitions' Module in September

Oct 23 2018
by Fiona Wallace-Mason

After the Finance module held in Zurich the week before, it was now time for the St. Gallen university Exec M.B.L. course to move straight onwards at a blistering pace to the next European module - this time it would be in Frankfurt. The towering steely financial centre of the continent, mighty Frankfurt is the headquarters of many of the major German financial institutions. The module “Mergers & Acquisitions” awaited the Exec M.B.L. participants, teasing us with all the suspense and shimmer of a Hollywood movie, promising to unfold the seemingly glamorous story of the world of the high-flying and highly-driven investment bankers, where tensely fought-out deals are all underpinned by ruthlessly winning strategies and flawless determination to detail. This was going to be a module brimming with intensity and expectation..

Arriving in Frankfurt

Day 1

The Executive M.B.L.-HSG participants were greeted at the impressive and gleaming offices of our host, Gleiss Lutz law firm. Fresh hot coffee and snacks a-plenty were all offered along with a first-class service and the attention to perfection was evident from the start of our week, catering to our every need. If the levels of professionalism (as well as the layout and size of the tall classroom ceilings) where anything to go by, this module was going to have all the high standards of an extremely well-run, attentive and efficient German law firm.

Mr. Christopher Wright, barrister and solicitor from Görg Partnerschaft von Rechtsanwälten in Berlin, opened the programme in a very professional and welcoming speech. He immediately captured our attention by opening up and challenging the group as to what the world of mergers and acquisitions really meant as well as providing us with a promising outline of a very exciting module in the week ahead. The group itself was immediately very nicely engaged into the discussion and it was clear this was going to be a module where the participants would be actively connected to get the most out of all the insights and detail coming our way, in order to foster a practical and critical understanding of this challenging and vast subject.

Mr. Wright continued with his lecture during the morning and provided a very strong and insightful introduction to M&A, leading the group intelligently through many important aspects such as M&A fundamentals as well as familiarising the group with the respective M&A parties and their roles. Packed full of detailed transaction examples in context, the various stages of the M&A process and the respective legal issues, this presentation provided the group with everything necessary to fully engage with this highly interesting topic and to appreciate the complexity of the M&A process timeline and the typical stages of M&A. The group could really acquire a deeper understanding of the strategy and tactics employed within the preparation of principal M&A documentation. With a further overview discussion on the sales and purchase agreement, moreover, this presentation was nicely positioned to provide a sound understanding for further discussions and detail later in the week. Towards the end of the presentation, Mr. Wright then provided a broader contextual view on the subject, by talking to the group about M&A market trends and outlooks. It had been an incredibly interesting start to this module, with a perfect blend of much detail, examples and broader context and an introduction which we had all thoroughly enjoyed.

Later on in the day, Dr. Oliver Pfeil, Director and Senior Porftolio Manager at Deutsche Asset Management, shared his M&A experience with the group, explaining about elements of the “acquisitions for growth”. He provided a succinct and clear outline of the Portfolio Manager’s review, the investment process and the various considerations of risk and return as well as loss prevention strategies. The session finished with a market overview and a very interesting M&A example, taking the group step-by-step through each key element of the case. The group learned how critical the valuation is for the success of a deal and that there are many ways to value a company. Furthermore, a clear takeaway of learning for the group was how the financing structure is such a big part in how both parties view the M&A deal.

Next, it was time to learn about the  “Banking Perspective”.  For this session, Mr. Mark Schmitz, a Director in M&A at Deutsche Bank AG, in Frankfurt, provided us with a highly informative and valuable overview, specifically with regard to the Investment Banking Perspective of M&A. A very comprehensive overview was provided as to how the various divisions work together and how the Corporate Finance department fits into the overall scheme. Mr. Schmitz explained the various drivers of M&A volumes as well as an overview of deal structures and the M&A process.

After a long and very intense day which had been packed full of valuable insights into M&A, we were all very warmly hosted by the partners at Gleiss Lutz and our course tutors to a superb evening held in the glassy upper floors where we enjoyed tasty cuisine and welcome drinks with a view. Mr. Nägele, Attorney-at-Law, one of the course leaders, gave a very professional and hugely informative welcome speech to the group. He introduced us all to what Frankfurt had to offer and make us feel fully at home, totally setting the scene for the week to come and whetting our appetites to explore this fantastic city over the next few days. Overlooking a spectacular view of Frankfurt city from our skyscraper host offices, bathed and sparkling in a golden evening light, the whole world of M&A seemed to come alive around and below us, as we admired the view and the energy of the buzzing metropolis and highly enjoyed mixing with our hosts and fellow students. It had been an immensely exciting first day and the efforts of our tutors and hosts had been highly appreciated, leaving us with a very positive first impression and eager for what lay in store tomorrow.

Day 2

Another brightly sunny morning beckoned and the second day saw the group being led by Dr. Klaus Riehmer, partner at Mayer Brown, where he heads up the German Corporate/M&A practise and Dr. Martin Heuber, a partner at the Frankfurt office of Mayer Brown. Outlining M&A Structuring and Financing, this was another back-to-back session packed full of detail and where the group hugely benefitted from the vast experience of our lecturers which brought a huge amount of gravitas of the subject directly into the classroom. A variety of topics were covered including Private Equity, Increased Protectionism, Strategy Development and warranty and indemnity insurance to name a few.  At the end of this session the group had garnered a fuller understanding of the global market shares of M&A, an understanding of some of the largest recent cases, funds structure in Private Equity, an introductory taster of Chinese M&A and inter alia, a contextual outlook on the financial sector in consideration of FinTechs etc. This was followed by Dr. Heuber’s session which gave a highly interesting account of M&A specific to the effects on existing financing, public takeover financings and a great session on documentation and covenants. The group were taken through the finer details of leveraged loan agreements and the structure and key economics and acquisition finance specifics in loan documents as well as being familiarised with other acquisition finance documents.

The afternoon consisted of a fascinating insight, led by Mr. Wright and Mr. Surinder Sidhu, Director of Debt Finance at OakNorth Bank in London. Mr. Sidhu’s extensive experience within leverage financing of private equity transactions, as well as his experiences of the financial crises and his insight into the world of Distressed Assets was fascinating for the group to listen to and really brought the topic to life. The group were able to grasp an understanding of some of the intricacies of the negotiating process in such situations and to develop a further appreciation of the importance of undertaking extensive restructuring and reorganisation of assets under management. In the afternoon, the group was given a challenging task to work together on as a graded exercise which concluded in some highly interesting debates and discussions.

The group exercise, deeply engaged in problem solving bringing real situations to life in the classroom.

Then, in the evening, it was time to relax and explore some Frankfurt traditions.  We went to a fantastically authentic Frankfurt biergarten “Adolf Wagner”, a family run biergarten since 1931 which is housed in the “Dribbdebach”, the part south of the River Main in the beautiful Sachsenhausen district. Here, the group was really about to experience and soak up the Germanic traditions. A fun time was had by all as the group enjoyed chatting with the course tutors and together, as well as sampling some of the traditional German cuisine and of course a little bit of the locally procured Apfelwein known as “Schoppen”. The biergarten ambience was perfect, sitting on rows of wooden benches and enjoying the perfect September evening altogether in Frankfurt.

From dusky evening to moonlight magic over the River Main am Frankfurt.

Day 3

Starting promptly again, the third day promised a fascinating look into the Tax Planning part of the course as well as a closer look at the finer details of the M&A agreement. In the morning, Madeleine Syré, International Tax Partner at PWC in Frankfurt gave the group an excellent presentation widening our knowledge of international tax planning considerations and covering elements such as holding structures, financing structures, Intellectual Property structures and Anti-avoidance Rules.

Next, Dr. Holger Erwin, a highly experienced practising M&A lawyer who had practised with Hengeler Mueller, Allen & Overy in Frankfurt and London as well as Heuking Kühn Lüer Wojtek as head of their German-Swiss operations in Zurich, provided the group with an excellent and fascinatingly detailed look at the composition and finer details of the M&A agreement.  The content of Dr. Erwin’s presentation was extremely useful and really got the group thinking about the technicalities of finding “standard solutions to standard problems” within an SPA. Furthermore, the group found the content of the presentation well-placed to be contextually linked to the wider timeline discussions of an earlier presentation from Mr. Wright in respect of the overall M&A process. The function and format was very clearly explained and the group learned about the different styles of agreements, for example US, UK, Continental and international versus local agreements and typical content.

In the afternoon, Dr. Erwin gave the group a highly comprehensive outline of the differences between public and private M&A.  After the introductory lecture, which firstly covered the technicalities, the group were asked to discuss a case study which, again as with other lectures, really brought M&A to life within the classroom and this led to very interesting debates and really practical considerations of the very detailed and relevant case study which was provided to the participants. This was altogether, a highly detailed and extremely useful afternoon session which had covered multiple M&A aspects including inter alia,  a basic understanding of the technicalities of “why public M&A is regulated the way it is” along with a look at the main “objectives and exposures” of the different stakeholders and the different approaches to public M&A possible today. It had been a day packed full of learning and the group looked forward to another enriching day on day 4.

Another glorious September day beckons in Frankfurt...

Day 4

Almost at the end of the week -  the group participants had received so much invaluable information at this point. Day 4, promised to start with the “nitty gritty” of the M&A valuations and how these are pulled together. The group smoothly grasped this topic under the clear and enthusiastic guidance of Mr. Boris Tramm, CEO of GxP German Properties. Mr. Tramm’s extensive experience with capital market transactions and pan-industry management functions conveyed a deft, comprehensive and inclusive demonstration of valuation work which made the subject very easy and enjoyable to follow. Value versus price, being alert to valuation bias, model complexities versus simpler models, intrinsic valuation models, discounted cash flows, discount rates, capital asset pricing models, SOTP valuation, beta etc., were all explained in a manner which nudged naturally towards the important reminder for the participants -“valuation is a craft, which can be learned by doing”.

In the afternoon, Dr. Stefanie Tetz, Counsel of Clifford Chance shared her specialist experience in M&A and corporate finance. Having extensive and valuable knowledge of M&A in the Peoples’ Republic of China, Dr. Tetz provided the group with a precious insight into China outbound investment as well as the intricacies of Foreign Direct Investment in China, packed full of examples and wisdom to aide the groups’ understanding of this fascinating topic. The group appreciated that clearly, the whole presentation was underpinned with an appreciation and deep intention of highlighting the necessary cultural nuances that were absolutely critical to set the context of working in this particular jurisdiction. It was exciting and as fascinating to understand about the Chinese legal system, the opening up of investment environment for M&A with Chinese partners and the negation methods, complex M&A transactions and the need to really understand the specifics of the political and legal environment.

Later in the afternoon, Dr. Michael von Saldern, Chief Procurement Officer at Siemens Power Generation Products in Frankfurt, led the group through a very interesting session on “Post Merger Integration”. This was another extremely clearly presented topic, sailing though the logic of the deal, unravelling the detail of different types and phases of deals, and discussing the benefits of integration.  Finally, with Dr. von Saldern set out all the important considerations to be aware of during the integration process and discussed the importance of trying to anticipate and navigate issues arising and the risk management thereof.

In the evening, some of the group decided to take the opportunity to catch a different perspective on the city by going up the Frankfurt Turm (tower). We were blessed to have another beautiful  Frankfurt sunset as we enjoyed watching the glimmer of lights coming on in the offices, whilst we considered those figures as their desks working down below, indeed maybe even M&A lawyers, bankers or otherwise, working on some exciting deal or other…

View from the top of Frankfurt tower ... a resplendent perspective of the city.

Day 5

The final day started with a session on Labour and Employment Law with Dr Thomas Winzer, one of our hosts from Gleiss Lutz.  Dr. Winzer provided the group with a most interesting session about European Labour and Social Law in the context of M&A Transactions. Outlining the preconditions of a “Transfer of Undertaking”, Dr. Winzer explained the ECJ’s definition of an “economic entity” and went on to outline the avoidance of a “Transfer of Undertaking” in both an asset-intensive versus a labour-intensive business. Thereafter, discussion was held about the “Transfer of Rights and Obligations” as well as looking specifically at Germany, UK and France and the liability considerations. Dr. Winzer then discussed a couple of really useful case studies which demonstrated the “Participation Rights of Employees Representatives in Connection with M&A Transactions under German Law”. This was followed by a useful outline of European Social Law.

The remainder of the day was under the auspices of Mr. Peter Nägele, Rechanswalt & Attorney-at-Law (New York) who advises board members and entrepreneurs and holds a 25 year record in leading positions in the service sector and industry. Mr. Nägele’s extensive experience as general counsel, including being a member of the management board of Siemens’ largest business division Energy, responsible as general counsel for all legal affairs, as well as working for prestigious international law firms including more than 15 years at Clifford Chance where he was on the firm’s global executive board, ensured that the group was extremely well-placed to receive first-hand invaluable knowledge in respect of complex business transactions within the area of equity capital markets (IPOS), M&A and issue management.

After learning about the key IPO elements, Mr. Nägele presented an overview of the Equity Capital Markets and the “Mechanics of an IPO”. In a style which brought the world of IPOs really very much to life, Mr. Nägele expounded on the pros and cons of going public and gave a very elucidating account of the participants and the respective sequence of events. Walking us the process, from the sound examples referenced, the group could really gain an understanding and sense the excitement, complexity, unpredictability and anticipation of such an event the various elements at stake. Mr. Nägele’s engaging manner exuded much enthusiasm and story-telling style which made the whole explanation and case studies so relatable and practical. Clearly, this process was not just about all the technicalities but importantly also, all of the unexpected and unthinkable variables which played a probability in influencing the outcome of such an event. Mr. Nägele walked through the “going public” timeline which was extremely helpful to the group. Next, we learned about the prospectus, risk factors the approval process and admission procedure. Prospectus liability brought about a good discussion from the group and next, a couple of case studies provided further application of the issues which included the fascinating case of Deutsche Telekom AG.

From 17.00hrs after the lectures had finished, the students were split up into the respective groups and then went off into the offices and used the evening to prepare for a group presentation on Saturday.


Saturday morning had arrived, and it was the end of a highly interesting week.  It was time for the group work session under the guidance of Mr. Nägele and two groups were asked to present to the rest of the wider group. This was followed by some exciting professional role playing situations and an analysis of the selected legal issues arising from the group case work. The case study was a very practical example of what courses of actions would be available to a management board and the implications for the timing of an IPO together with the legal and other risks for the individuals. The group certainly gained a lot from being “in the shoes” of the General Counsel and having to think how to act appropriately and provided advice and legal guidance in such a situation. What followed was a very exciting explanation of case as unfurled by Mr. Nägele and the group was led though the respective criminal law, criminal procedure, capital market law and an explanation of the impact on the schedule. This had been a most exciting and relevant session and the group enjoyed the final closing of a module which had merged into an acquisition of much specialist knowledge.

Special thanks go to the hosts Gleiss Lutz who played a really huge part in ensuring that conditions were really perfect, the lay out of the classroom was exemplary (including the chocolates!), and the entire group was made very welcome and looked after throughout the week. Nothing was too much trouble and this was a real credit to all at Gleiss Lutz who showed us a highly efficient, professional and welcoming stay. The Exec M.B.L.- HSG course tutors all worked extremely hard to make the course very relevant, very interesting and of course, it ran like clockwork!

Overlooking the Gleiss Lutz building where we had spent the week

We had started the week in suspense and with high expectations for this module to be brimming with intensity….At the end of it, after all the packed detail, the amazing experience of the lecturers and their shared insights of case studies, as well as the technical details explained, a veil had been lifted. Any Hollywood movie-induced preconceptions of the seemingly “glamorous stories of the world of the high-flying and highly-driven investment bankers in tensely fought out deals”, had been transmogrified into something so much more meaningful and technical. The group were now well positioned, to be so much more deeply informed with an appreciative understanding of this subject thanks to the superbly enriched and detailed sessions held throughout the week.

The high-powered finance and business hub of “Mainhattan” as it is known, (or the financial district of Frankfurt), had opened its heart to our group and we had truly experienced the energy and intensity of the exciting world of M&A. It was time to say “Dankeschön” (thank you) and “Auf Wiedersehen” (until we meet again) to this glinting metropolis, as all we continue on our journeys and look forward to the next acquisitions of knowledge.