Risk Analysis

• Evaluate risk factors for target acquisition company.
• Evaluate risk factors present in the parent (acquiring) company.
• Prepareareportonthisanalysis.
• Thisreportshoulddeliver intoareasofriskexposurefortheparentinmakingtheacquisition.
• Thekeyistoidentifythemajorriskexposuresandhowtheycanbemitigated.

STARBUCKS AQUIRING DUNKIN' BRANDS - SEE ATTACHED OUTLINE

Risk Analysis Risk Analysis Overview The acquisition target company's risk exposure often adds to that of the acquisition company, creating new risk exposure for the combined entity. Determining what that risk may be is part of determining whether an acquisition should be undertaken. Integration Issues Integration projects will be selected and evaluated upon the values of positive financial impact and their probability for success. Integration issues include the following: Leadership selection Corporate culture Networks and information flow Communication plans Transition of non-management staff Facilities Franchise services International operations Addressing the Issues o Leadership selection o Corporate culture o Networks and information flow o Communication plan o Transition non-management staff o Facilities o Franchise Services o International operations Target Acquisition Company Risk Analysis o Strategic Risk o Reliance on Franchises o Reliance On Growth o Credit Risk o Liquidity Risk 1|Page Risk Analysis o Capital Requirements o Interest Rate Risk Risk Exposure to Foreign Exchange Currency Rate Changes o Market Risk from Portfolio Price Movements o Transaction Risk o Compliance Risk o Reputation Acquisition Company's Risk Analysis o Strategic Risk o Credit Risk o Liquidity Risk o Interest Rate Risk o Foreign Exchange Risk o Market Risk o Compliance Risk o Reputation Conclusion 2|Page