MBAs investigate US$14 billion case with Bayer M&A leaders

A group of MBA students (full-time and executive) from Rotterdam School of Management, Erasmus University (RSM) investigated a real-life mergers and acquisitions case with Bayer AG’s Frank Rittgen, global head of M&A, and Charles Morris, vice-president M&A. The interactive guest lecture was organised by Dr Arjen Mulder, assistant professor of finance at RSM, and took place on campus on Thursday 21 September 2017.

Here’s RSM MBA student Joseph Scholten’s report of the lecture:

“Bayer AG: bidding to win Merck’s OTC business”

This is old news you might think when in fact the US$14.2 billion deal was closed during the second half of 2014, but for the Full-time MBA and Executive MBA students of RSM’s Mergers and Acquisitions class this headline became a real challenge for several hours. Dr Arjen Mulder had been part of the team of professors writing the equally named Harvard case study which was published in January 2017.

Along four questions, we students relived the challenge of evaluating Bayer’s final offer for Merck’s Over-The-Counter (OTC) business. The analysis which was done in preparation of this meeting included strategic fit, the stand-alone valuation and the estimation of potential synergies. While all of this sounds like a lot of theory, this time it wasn’t. In the first row of the classroom sat Frank Rittgen and Charles Morris.

Both M&A leaders from Bayer had travelled from Leverkusen, Germany, to provide this lecture. Both were the key people leading the deal making process for Bayer’s M&A department in 2014. Student groups were asked to speak in front of this panel and propose their thoughts and criticism of the deal. It became clear in the first minute that the guests of this lecture knew exactly what they were talking about. While most students were happy to present their line of thinking and their logic behind key assumptions like the WACC or the projected growth rates, the actual challenge was the interpretation of these numbers. Therefore, one of the key learnings certainly was the application of sanity checks.

It was impressive how versatile the positions and angles of Frank Rittgen and Charles Morris were to question the numbers or assumptions presented. “Imagine you are our competitor Reckitt Benckiser that trades at an Enterprise Value-to-EBITDA multiple of 18x. How much is an improvement in EBITDA worth to you?”, “Do you think it is possible to ask our board of Management to share unrealized synergies at a rate of 50% upfront with the Merck?”.

This highly interactive and challenging environment created a great learning experience and certainly a taste of the real stuff. The lecture concluded with a networking drinks and sandwiches.

Experiential learning: collaborating with business

RSM regularly invites business leaders to talk to students to make them aware of real business issues. Bayer is a corporate partner of the MSc International Management/CEMS programme.

Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top 10 business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become critical, creative, caring and collaborative thinkers and doers. Study information and activities for future students, executives and alumni are also organised from the RSM office in Chengdu, China.

For more information about RSM or this release, please contact Marianne Schouten, communications manager for RSM, on +31 10 408 2877 or by email at

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