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Turnaround or Contract Merger: A conceptual model to protect sick and government companies

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  • Reddy, Kotapati Srinivasa

Abstract

The prolific competition and unanticipated customer loyalty gave the ideological thought to craft combat strategies among firms, now it became a warriors’ battle. To achieve this, global firms are designing tactics to become a gladiator by choosing merger & acquisition as a synergistic choice. M&A is an opportunity for target firm shareholders in a high premium, on the other hand escalating monopoly by an acquirer in the respective market. These inorganic options will increase the capitalism in mixed economy countries that result in the loss of government control on public sector enterprises and sick industries. Availing this gap, the present conceptual study is aimed to introduce a new weapon for emerging market nations to protect state control and keep public belief. Exclusively, we try to accommodate and suggest a new financial arrangement or scheme against the existing model, i.e. Leveraged buyout (LBO). Finally, this array is supported by the Indian sick industries as case examples which were disappearing now. It also ensures that the economic sustainability and progress of nation would be achieved by the proposed ‘Contract Merger’ model.

Suggested Citation

  • Reddy, Kotapati Srinivasa, 2016. "Turnaround or Contract Merger: A conceptual model to protect sick and government companies," MPRA Paper 74263, University Library of Munich, Germany, revised 2016.
    • Handle: RePEc:pra:mprapa:74263
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    References listed on IDEAS

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    1. repec:bla:jfinan:v:44:y:1989:i:1:p:41-57 is not listed on IDEAS
    2. Reddy, Kotapati Srinivasa & Nangia, Vinay Kumar & Agrawal, Rajat, 2013. "Indian economic-policy reforms, bank mergers, and lawful proposals: The ex-ante and ex-post ‘lookup’," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 601-622.
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    4. Reddy, Kotapati Srinivasa, 2015. "The impact of the global financial crisis on border-crossing mergers and acquisitions: A continental/industry analysis," MPRA Paper 63563, University Library of Munich, Germany, revised 2015.
    5. K.S. Reddy & En Xie & Yuanyuan Huang, 2016. "Contractual buyout - a legitimate growth model in the enterprise development: foundations and implications," International Journal of Management and Enterprise Development, Inderscience Enterprises Ltd, vol. 15(1), pages 1-23.
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    More about this item

    Keywords

    Corporate restructuring; turnaround; merger; acquisition; LBO; disinvestment;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration

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