Simulation | 2009

Finance Simulation: M&A in Wine Country: No. 3289.

by Timothy A. Luehrman and W. Carl Kester

Abstract

In this simulation, students play the role of CEO at one of three publicly-traded wine producers: Starshine, Bel Vino, or International Beverage. Each player evaluates merger and/or acquisition opportunities among the three companies and then determines reservation prices, values targets, and negotiates over deal terms before deciding whether to accept or reject final offers. Each company's stock price reacts to the bidding activity, and all bids are public, creating a competitive and fast-paced negotiation environment. The simulation contains a built-in chat feature, allowing students to negotiate privately online. Ideal as a capstone experience in a first-year MBA finance course. Students should have exposure to the fundamentals of finance before playing. Also suitable for elective courses in Finance, Negotiation and Strategy. Minimum technical specifications: Computer with minimum 1024x768 screen resolution, High speed internet connection (DSL / cable modem quality), Windows 2000, XP, or Vista / Macintosh operating systems, Internet Explorer 6+ / Firefox 2.0+ web browser with javascript and cookies enabled, Flash Player 9+ browser plug-in, Microsoft Excel (optional but several simulations allow students to export data for manipulation in Excel).

Keywords: Mergers and Acquisitions; Negotiation; Valuation; Value Creation; Food and Beverage Industry; Agriculture and Agribusiness Industry;

Citation:

Luehrman, Timothy A., and W. Carl Kester. "Finance Simulation: M&A in Wine Country: No. 3289." Simulation and Teaching Note. Watertown, MA: Harvard Business Publishing, 2009. Electronic.