Now let's work on the valuation of the target.

The first thing we need is the volume weighted average price of the target, and we can get that from Felix.

And you can see here on the top left, the volume weighted average price share price is $218.42 . So let's type that in.

Next we need the acquisition premium. If you recall, the handout gives us a premium of 30%. So now we can calculate the acquisition price, and that would be the VWAP times one plus the acquisition premium. That gives us 283.9.

Now that we have the price, let's work on the shares outstanding. Starting with the basic number of shares. Again, if we look at Felix, you'll see in the middle an EV bridge. And there you can find the shares outstanding at 186.9. So let's type that in. Great.

Now before we can calculate the acquisition equity value, we need to get the fully diluted shares outstanding. And for that we need to work on the dilution adjustment. So over here on the right, you have a small table that lets you work on things such as stock options and RSUs and their impact on the share count. So we need this data from Felix again, and let's go back to our EV bridge. Now here you see dilution adjustment at 1.4. Let's click on that number and you will see the detail of how they get this 1.4. Now as you can see there, the company has 2.5 million in options outstanding with a strike price of 191.09. It's got PSUs or performance share units of 0.4 million and RSUs of 0.6 million. So let's bring that data over to our Excel template.

We have 2.5 million stock options with a strike price of 191.06.

We have 0.6 million in PSUs and 0.4 million in RSUs. Of course, for these kind of instruments, we don't have a strike price. So now we can compute the dilution for, for all three of these instruments, starting with stock options. For stock options, we can use the treasury stock method where we simply take the acquisition price of 283. I'm going to lock that minus the strike price, and we're going to divide that by the acquisition price. Again, lock that. And then we take that entire formula and we multiply times the amount of stock options, and that will give us 0.8. And of course, you can also put that formula inside a max function to prevent a negative or anti-dilution in this case.

Now, for the other two rows, the RSUs and the PSUs, we can simply take the amount and link it to the dilution column.

Now we can go to our dilution adjustment section and we can add the dilution from all three instruments and we get 1.8. Please note that in Felix, the number that we get is 1.4. And the reason is that Felix does not incorporate the PSUs in their calculation, mainly because there is discretion as to whether you want to incorporate PSUs or not.

In our case, to be comprehensive, we're going to incorporate all of these diluted shares.

So now that we have the dilution adjustment, we can compute our fully diluted shares outstanding by taking the basic count plus the dilution adjustment. That gives us 188.7.

Finally, we take that 188.7, we multiply times the acquisition price, and that would give us an acquisition equity value of about $53.6 billion.

So now let's work on the net debt at acquisition of the target.

So start with the financing of debt from the targets balance sheet.

Of course, we can get that from Felix.

If you look at the EV bridge again in Felix, you will find that the company has 12.3, 12.2 billion of debt in their balance sheet. So let's take that number and bring it over to the template.

Great. And now we need to get the cash as well as the short term financial assets of the target company, and that can be found in the same section at 517 million.

Great. So now we can compute the net debt as debt minus cash.