Let's talk about stakeholder's approach. Well, sometimes people even elevate that to the idea of stakeholders paradigm. Now, who are stakeholders? We can easily start with the famous quote from Shakespeare's As You Like It, when he compared the world to a stage and all the people to players. So we are talking about the people, individuals and groups of people, who have vested interests in this transaction. So, we will proceed as follows. So, this is the stakeholder's approach. And let's say we're talking [INAUDIBLE] this is Company A. This is Company B. And in the transaction, whatever, A buys B or they just merge, and we arrive at the company AB. The first thing, as we can see, is that they're stakeholders of the company. They're stakeholders of the Company B. There will be stakeholders of the Company B, and on the top of that, there are stakeholders beyond this. The people who do not participate directly in these transactions, or who are not, let's say, not only insiders, but they are linked to that. So we can see some dimensions of this idea of stakeholders. We can talk about internal Versus external. We can talk about direct Versus indirect. And this is sort of, we can talk about national or international or global. So you can see that that makes it, on the one hand, more difficult, because we have to take into account many dimensions like that. But on the other hand, that later will allow us to more directly see the benefits of some of these stakeholders. Well, clearly, the idea of stakeholders is not limited to this area of M&As. This is widely used in project management, this is widely used in organizational management. But here, it plays the utmost role. This is seen, not all the way on the surface, but this is the core of the approach to study these transactions. Now, let's talk about some stakeholders of. First of all, these are financial stake holders. Well, these are stock holders. And these are debt holders. >> So the people who in both companies who are the owners, or who their creditors, clearly, they are significantly affected by this transaction. Well, first of all, if B, which is oftentimes called the target, the company that is being purchased, it's shareholders, they get some money or stock. But then, they may stay out of this, may stop being stockholders in this company. So they are indeed affected. By the same token, debt holders, let's say if Company B had little debt, and then Company AB, as a result, will have a lot of deb,t if the company A, to buy it, had to borrow heavily. Then, the debt of the former debt holders was sort of riskless, now is much riskier. So they will be affected. Now but another area here that is on the surface is that this is the people who work at these companies. And these people are in two groups. This is the management. For us, management that are decision makers. And then, if you will, I'll put it like 2A, this is the employees. They're decision takers. Now, what does that mean? Let's say you work for a company and then someone else buys your company. And then let's say your company is in New York and now it's moving to California. So you come into at your office one morning and they say, well, you know our company has been bought by another company. Now, we have all new management and we all move to California. If you don't want to move to California, sorry about that, you have to take a hike. So you are indeed affected. When we talk about the management, that's another story that is clearly seen. These people are active in this transaction, for some of them that may be the lifetime chance. And, let's say, you're the CEO of Company B, and your company is being purchased. What is your future? In the combined company, there is only one position of a CEO. So you either leave, and that is not maybe so good, well, unless you get a nice compensation. Or you find some other position in the merged company. So that is clearly quite a bit of an effect. Well, who else are, so these people are sort of most directly affected by this transaction, although in different ways. But there is another group of people that I will put, let's say competitive. Competition. Or market stakeholders. So sometimes people say in a sort of metaphoric way, these are the guys from the port across. So you talk about clients Customers. You talk about suppliers. You talk about competitors. So all these people see where the transaction took place at completely different, or maybe not completely, but still a different environment. So let's say you've been a customer of Company B, now you are the customer of Company AB because Company B no longer exists. By the same token, yesterday, you as competitor, were quite strong, because you were competing against this small company. Now, you're competing against a huge company, so your bargaining power is diminished. This way, you seem to be affected. Now, there's another group of people who are affected and, which I put still on this page. These are market professionals. Who are these people? Lawyers, investment bankers. So you already see that these can be here, if these are investment bankers. And they may be anywhere else. So, but these are he people who actually participate in the implementation of the transaction. No M&A transaction can occur without the support of specialists in capital markets, without investment bankers, without lawyers, without some other specific people here. So these guys, they play an important role, and they are also direct participants. So on this page, we see more or less direct participants. But, and it seems to be, well, maybe we forgot someone, but the idea is clear. If you find some individual group of people, you can always sort of put them somewhere here. But there is another fundamental dimension of stake-holding, and this is sort of a broader look. so these are the people, groups of people, institutions and environments, if you will, that are external, but that are affected by these transactions. Who are these stakeholders? Well, I would put quote in the indirect. Because sometimes they are sort of more or less direct. Well, who are these people? Regulators. Well, regulators either give a go ahead to a transaction, they approve of that, or they disapprove of that. Well, this is the government in general. Well, you can say that to some extent the government also can be thought of as a regulator. But we can say that sometimes the government, let's say it takes a certain stance. Let's say the government believes that this global trend of this industry becoming more concentrated, maybe it is dangerous. And then the government sort of finds some, for example, anti-monopoly bodies. They may be both here and there. Now, we go even further. You can say that this is the society in general. Why is that so? Because, let's say, if you see that some people make fortunes in just doing something that does not seem to be very productive or value creating, that sends a negative signal to the society. If people really become very wealthy on some speculative thing, that's not a very positive signal. And sometimes this frenzy really is dangerous because if a society gets thrilled, then the probability of a certain fundamental crisis in the financial markets is very likely. We talked about that in our first course, we talked about that in our second course, and we are talking about that right now. But we can also say that this is the market. And when we talk about the market, we don't have to be limited only to the market for M&As. Although, clearly it is affected. But we talk about global markets. We talk about some global things. We can put here things like, well, we can talk about technology. And you can say, well technology is not people. Well, yes and no. For example, now, when everyone has more or less direct access to technology through social media, through the Internet, then you can say that this is also part of the stakeholding. And then, finally, we can say that this is sort of the global market. I would put the global environment, because this is not only the market, this is maybe some politics, or geopolitics, or whatever. So some transactions are so great that in their dollar amount they may be compared to the GDPs of some smaller countries. So you're talking about something very special here. Now, I devoted this episode to basically listing these kinds of stakeholders. And the main question that persists here is who benefits from that? If you put it in Latin form, this is [FOREIGN]. So in our analysis of all terms, stages, frameworks, ideas, values, processes, results, we will always find some groups of primary stakeholders who are likely to benefit from the successful transaction. Or some of them may lose from that. Or benefit from the failure of this transaction, or may lose from that, too. So this is the general idea. And like I said before, it seems to be very easy to avoid all this, because this is sort of a, that requires analysis, that requires understanding, logic, thinking, comparing, making decisions, and building up on what we know. But this is the only way to assess any transaction or process in a sort of right way. Otherwise, we can easily fall in the temptation to say, well, this huge synergy will save us all. It will most likely not.