Seminar 1 — Is it Possible for Samsung to Acquire Nvidia?

FIN435 • Chapter 21: Mergers & Divestitures • Hostile takeovers, valuation, regulation, and defense tactics
Theme:

Seminar Agenda 60–75 minutes

Core question
Feasible, financeable, and approvable?
Skills
Valuation + Deal Mechanics + Regulation
Deliverable
1-page memo + defense plan
1) Warm-up: What kind of merger is this?
  • Vertical? Samsung is a chip manufacturer; Nvidia is a fabless designer/platform firm.
  • Conglomerate elements? Different business models (hardware manufacturing vs AI compute ecosystem).
  • Strategic motive hypothesis: lock-in the AI stack (design → manufacturing → packaging → distribution).
2) Feasibility screen (the “3 gates”)
Gate A — Financing & valuation
  • Can the acquirer fund a control premium at scale (cash, stock, hybrid)?
  • Would the offer be credible to target shareholders?
  • Does the deal create value (synergy) net of premium?
Gate B — Regulation & national interest
  • Antitrust (FTC/DOJ), plus national security review risk for critical tech.
  • Data, supply chain, advanced compute, defense-adjacent considerations.
  • Even “friendly-country” acquirers can face mitigation or a block.
Gate C — Governance & defense tactics
  • Board control, shareholder vote dynamics, and takeover defenses.
  • Can the target delay or dilute a hostile bidder?
  • Can a “white knight” appear?
Bottom line preview
In a hostile cross-border attempt, the binding constraints typically become (i) financing scale and (ii) regulatory/national-security approvals, even before classic synergy math.
3) Core Concepts: M&A map (Chapter 21)
Topic Description / key points
Types of mergers Horizontal: same industry; Vertical: different stages; Conglomerate: unrelated businesses.
Motives Synergy (cost/revenue), market power, tax benefits, diversification (not always value-enhancing).
Valuation toolset Comparable companies, precedent transactions, DCF (FCF discounted by WACC), and accretion/dilution.
Process LOI → Due diligence → Definitive agreement → Regulatory approval → Close/integration.
Hostile defenses Poison pill, white knight, staggered board, golden parachute, dual-class, legal/regulatory strategy, Pac-Man, crown jewel, greenmail.
Regulation Hart–Scott–Rodino (antitrust notification), SEC filings (TO, 13D/G, S-4), plus national-security review where relevant.
Recent trends Tech consolidation, ESG scrutiny, data/compute as strategic assets, and increased review intensity for sensitive sectors.
4) Hostile takeover defense plan: “What can Nvidia do to scare off Samsung?”
Defense tactic What it is How it scares off the bidder
Poison pill Rights plan dilutes bidder if ownership crosses threshold. Raises effective acquisition cost; disrupts voting power.
White knight Seek a friendlier acquirer or strategic alliance. Blocks bidder; reframes deal under national-interest narrative.
Staggered board Only a subset of directors elected each year. Delays control even if shares are accumulated.
Golden parachute Large severance packages for executives. Increases transaction costs; deters leadership replacement.
Dual-class / voting control Control retained through super-voting shares (if applicable/feasible). Bidder can buy economic ownership without control.
Legal/regulatory strategy National security / export-control / supply chain scrutiny. Raises probability of a block or heavy mitigation.
Pac-Man Target counter-bids for bidder (or strategic stake). Creates financial and strategic chaos; increases cost.
Crown jewel Threaten to spin/sell prized assets. Makes target less attractive or harder to control.
Greenmail Buy back bidder’s stake at a premium to end threat. Stops takeover quickly (but costly and controversial).
5) Discussion prompts (graded participation)
  1. Valuation: What premium would be required to gain control, and why would shareholders demand it?
  2. Financing: If the bidder can’t credibly finance the purchase, what happens to the “hostile” threat?
  3. Synergy: Identify 2 cost synergies and 2 revenue synergies. Are they believable?
  4. Regulation: What is the most likely regulatory “fatal flaw”? Antitrust, national security, or both?
  5. Defense: Which single defense tactic is most effective here, and why?
Optional: Succession lens — Identify three negotiation dynamics you observed (control, incentives, information asymmetry) and map them to M&A terms.
Teaching emphasis: Separate “strategic narrative” from “transaction reality.” In real M&A, the binding constraints are often financing credibility, governance mechanics, and regulatory approval—before synergy math.