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

Srinivasa Reddy Kotapati

MPRA Paper from University Library of Munich, Germany

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.

Keywords: Corporate restructuring; turnaround; merger; acquisition; LBO; disinvestment (search for similar items in EconPapers)
JEL-codes: G3 G34 G38 M1 (search for similar items in EconPapers)
Date: 2016, Revised 2016
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