Determinants of Cross-border Mergers and Acquisitions: A Comprehensive Review and Future Direction

The purpose of this paper is to review and summarize earlier studies analyzing the determinants of cross-border mergers and acquisitions (M&As). We primarily describe the motives of cross-border acquisitions and present the market performance for corporate control transactions over the period 1994-2013. Then, we illustrate the factors affecting cross-border investments and acquisitions in various taxonomies, namely deal-specific factors, firm- and industry-specific attributes, organizational learning and prior-acquisition experience, and country-specific factors. We draw special attention to the country-specific taxonomy for various reasons include economic and financial markets environment, institutional and regulatory framework, political situation (including corruption), tax system, accounting and valuation matters, geographical factors and cultural issues. We also provide a synopsis of earlier studies addressing the diversification motive in M&A decision. We thus propose that a host-country’s institutional laws and regulatory system, accounting and tax provisions, economic performance, financial markets development, investor protection, geographical, political and cultural factors distinctly affect cross-border acquisition’s completion. Lastly, we outline contemporary issues in M&A research, and suggest promising areas for future exploration

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

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

Makeup behind the Mirror; Going beyond Delisting? – A Case of NIRMA

The present realistic business case tussles with ‘De-listing and restructuring”. The fact facets, background data and tabular records with graphical preview of low cost producer of detergent from India “NIRMA Limited” discuss in this investigation report. Once upon a time, this is a likeable low cost range of detergent powder in India, now time takes to the place where it can fully streamline to sustain in the competitive prolific arena. Hence it is thriving for sales and hunting for cash flows for balancing its cost-to-benefit secrecy. Though, the man behind detergent chief and historic bore legend, Dr. Patel crafting his psycho views to uphold its market share to be through and entering in to the capital intensive business. There were mishap business announcement took place during Oct 2010, that remarked as thriving entity and on the other hand making high net worth shareholders happy were stirred authors to write this case manuscript

Why do Cross-border Merger/Acquisition Deals become Delayed, or Unsuccessful? – A Cross-Case Analysis in the Dynamic Industries

The purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with Asian emerging market-India, namely Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal with oil and gas exploration industry. To do so, we adopt a legitimate method in qualitative research, that is, case study method and thereby perform a unit of analysis and cross-case analysis. We suggest that government officials’ erratic nature and ruling political party influence were more in foreign inward deals that characterize higher bid value, listed target company, cash payment, and stronger government control in the industry. Importantly, the liability of foreignness and liability of localness was found to be severe in Indian-hosted deals that describe higher valuation, cash payment and dynamic industry. We eventually propose implications of mergers and acquisitions for extractive industries thus to enhance productivity and improve welfare measures during post-integration phase

Extant Reviews on Entry-mode/Internationalization, Mergers & Acquisitions, and Diversification: Understanding Theories and Establishing Interdisciplinary Research

This paper aims at accomplishing three objectives while drawing attention to the speed of adapting international management practices in emerging markets. Firstly, we summarize 67 extant review studies on entry-mode/internationalization, mergers and acquisitions (M&A) and diversification. Secondly, a synopsis of 17 theories propounded in different disciplines refer to business organization and management is being presented, namely theory of foreign direct investment, market imperfections theory, theory of transaction cost economics, internalization theory, eclectic paradigm, Uppsala theory of internationalization, long-purse theory, resource-based-view theory, resource dependence theory, theory of competitive advantage, organizational learning theory and learning-by-doing, bargaining power theory, information asymmetry theory, agency theory, institutional theory, liability of foreignness, and market efficiency theory. Lastly, we propose a two-band model both for establishing interdisciplinary research and for promoting more theory building research in global strategic management. Further, we also recommend a few research arguments for potential explorations in entry-mode, M&A and diversification

Institutional Voids and Tax litigation in Emerging Economies: The verdict of Vodafone cross-border acquisition of Hutchison

Extensive research on cross-border mergers and acquisitions performed in different institutional settings shows that legal and regulatory infrastructure, level of investor protection, and key macroeconomic factors are the most important determinants. With this in mind, we analyze and discuss the telecommunications market leader Vodafone’s cross-border acquisition of Hutchison equity stake in CGP Investments, which has long-time delayed (litigated) in an Asian emerging market‒India‒in the view of corporate gains tax. Regarding theory testing and development, we test 14 theories and two theorems that have propounded in five management research forums, namely international economics, international business (IB), strategic management, organization studies, and corporate finance. Further, based on shortcomings of the existing theories we develop new theory‒Farmers Fox Theory‒and offer lawful propositions for future research that would advance the existing IB knowledge on Institutional Voids in Emerging Economies. We therefore conclude that a given country’s weak regulatory system benefits both the acquirer and the target firm; at the same time, this economic behavior would adversely affect its fiscal income or budget. Lastly, we offer some policy guidelines for legal and regulatory system, and suggest fruitful recommendations for multinational managers

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

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

International Diversification through Acquisition: Fundamentals and Estimations of Vedanta buyout of Cairn India

Corporate valuations, financial strength in cash flows and opening up of debt facility favour more overseas acquisitions. Historically, corporate restructuring is a strategic, mechanized and chemical formula for achieving external growth to become a globalized diverse company. The phenomenon of ‘diversification’ is not new, where it was born in the timeline of the Kings. Markets are becoming highly connective, accessible, communicative and are reaching maturity at a very high phase. Acquisition is a choice to enhance the emerging and diversified markets. This case-based research study presents a case discussion, case analysis and opinion based inference on Vedanta – Cairn India cross-border acquisition deal in Indian oil and exploration industry. We also suggest a new forecasting model to estimate future free cash flows and firm valuation in the upcoming research field of corporate finance. The study exclusively shows reaction of stocks against acquisition announcement and compares with market performance

Market for Corporate Control and Contractual Buyout (CoBO): A New “Collective Ownership-and-Administrative” Strategy

Contractual buyout (CoBO) is a new “collective ownership and joint administrative strategy”, which gives an opportunity to buy a target firm in the given period when the given contract ends between acquirer, target firm, and financier. It is a takeover defensive method and tends to avail tax advantage via entering CoBO deal. In particular, it would be efficient inorganic magnetic for international venture capitalists and private equity firms while entering foreign markets. More specifically, CoBO is likely a concept of Dating-before-Merging and it would be the better model for cross-border mergers and acquisitions integration strategy. The explored CoBO propositions may be useful in various implications such as information symmetry and administrative changes, employment and employee role, operating performance and financial arrangement, tax savings, choice of market entry strategy, integration strategy, and government and policy makers. We recommend the developed country investors choose CoBO as investment vehicle to avail the competent business opportunities in both emerging and budding economies

Higher Education, High-impact Research and University Rankings: A Case of India

Purpose: The purpose of this paper is to discuss the current state of higher education, high-impact research and university rankings in Asian emerging market-India. Firstly, overview of higher education and government schemes for academic research is presented. Secondly, progress of high-impact research in India and China for citable documents, number of citations, cites per document and H-index in three subject categories is assessed. Lastly, we discuss potential challenges in the university education and recommend policy guidelines for betterment of the existing practices. Methodology: Being a qualitative study we have collected data from archival sources and thereby accomplished our goals based on inductive and deductive logics. Findings: Overall, Chinese universities are found to be outperforming Indian universities, especially in citable documents, number of citations, international collaboration, collaborative research projects, publications and editorship, and university rankings. For citable documents in all subjects category, United States is ranked 1st, followed by China 2nd, United Kingdom 3rd …, and India 9th. We therefore suggest that individual-, university- and country-specific factors have significant impact on high-impact research. Research limitations: The study is restricted to India. Hence, conducting a survey among government and private universities with regard to academics and research assessment measures deserves future research. Practical implications: A set of policy guidelines (research funding, collaborative research projects and research assessment council) is suggested for imparting quality academic practices and standards. Originality: This paper indeed is an original attempt while no earlier study links higher education, high-impact research and university rankings in India