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Recapitalization, mergers, and acquisitions are the most crucial issues confronting the Nigerian Insurance Industry (NII) in recent times. Yet information relating to…
Recapitalization, mergers, and acquisitions are the most crucial issues confronting the Nigerian Insurance Industry (NII) in recent times. Yet information relating to these issues is rarely reported in print. The purpose of this paper is to present the results of a survey aimed at understanding the challenges faced within the NII and the reactions of the insurance underwriters towards the recapitalization exercise in Nigeria.
Stratified sampling was applied in segregating listed insurance companies on the Nigeria Stock Exchange into top‐, middle‐, and lower‐management cadres. Random sampling was then used in selecting samples of the insurance company's staff. A questionnaire containing both open‐ended and closed‐form questions was used as the instrument to collect the primary data. Questionnaire administration was combined with personal interviews and record viewing in gathering relevant facts for use. Fifty‐four questionnaires were properly filled and returned from members of staff of the selected insurance companies. Chi‐square statistical procedures revealed the true position of the issues raised in the hypotheses.
Recapitalization has been enhancing the development of the insurance industry and mergers and acquisitions have remained viable options for companies to remain in business.
Limited financial and non‐financial resources, as well as a reluctance to release information by insurance companies and other operators in the industry, prevented further investigation.
The study serves as an information source for investors in the insurance industry.
Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.
The case explores information technology (IT) company Mindtree’s journey of 20 years from the time it was founded in 1999 to be different from others, and how it became a…
The case explores information technology (IT) company Mindtree’s journey of 20 years from the time it was founded in 1999 to be different from others, and how it became a target for acquisition by an Indian diversified conglomerate in 2019. It offers insights into developing organizational culture and values in an organization, threats faced by a company when promoters dilute their shareholding, and the strategies followed by the acquirer and the target firm. It also deals with the challenges in the acquisition of a knowledge service digital firm. After working through the case and assignment questions, students will be able to: identify the circumstances under which a company can become a target for hostile takeover; describe motivations of the acquirer firm in an acquisition; distinguish between acquisition and hostile takeover, and discuss salient features of Securities and Exchange Board of India (substantial acquisition of shares and takeover) regulations, 2011; list the defenses a target firm can adopt to ward off hostile acquirer; explore strategies followed by acquirer and target firms; analyze important ingredients of organization culture, and importance of cultural congruence in an acquisition; and discuss challenges faced by an acquirer in India, namely, legal, retention of clients and key people in the target firm particularly in hostile environment.
The case explores how ten IT professionals founded mid-tier IT services company Mindtree in 1999 in Bengaluru, India (home to Infosys and Wipro) to be different from others – by inserting themselves at a higher level in the value chain, being philanthropic as a part of broader business strategy to attract a certain kind of employee and customer. It developed a culture of equality, consideration and respect. Its attrition rate of 12 to 13 per cent was significantly lower than the Industries. Mindtree crossed annual revenue of US$1bn for FY 2019 and was growing at twice the industry’s growth rate. The most attractive part was that its proportion of revenue from digital services was about 50 per cent as compared to 25-35 per cent of other services vendors. With time, the share of promoters/founders declined and increased one investor’s shareholding of V. G. Siddhartha and his related entities. In early March 2019, the promoters’ stake was 13.32 per cent while Siddhartha had 20.32 per cent. Larsen and Toubro (L&T) one of India’s conglomerate entered into a share purchase agreement on March 18, 2019 with Siddhartha to acquire his 20.32 per cent stake. Immediately, L&T asked its broker to purchase up to 15 per cent of share capital of Mindtree at a price not exceeding INR 980 per share (each share of face value INR 10). This would trigger an open offer by L&T to purchase additional 31 per cent shares of Mindtree. The action of hostile takeover bid by L&T evoked emotional criticism from Mindtree founders. Mindtree efforts to defend itself could not materialize. L&T’s stake crossed 26 per cent on May 16, 2019. After Indian regulator SEBI’s approval, L&T’s open offer to buy shares from Mindtree shareholders commenced on June 17, 2019. The case examines motivation of the acquirer firm particularly when it is a conglomerate, and how a well-performing company became a target for hostile takeover. It looks at vulnerabilities of a target firm, and defensive steps a firm can take to fence itself against such takeover. The case also explores how organizational culture is built in a people-oriented business, namely, digital services, and what role it plays in a merger of two firms.
Complexity academic level
The case is suited for postgraduate students of management, as well as those undergoing executive courses in management.
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CSS 11: Strategy.
This paper aims to examine the influence of key macroeconomic factors on the inward and outward acquisition activities of six ASEAN (ASEAN: Association of Southeast Asian…
This paper aims to examine the influence of key macroeconomic factors on the inward and outward acquisition activities of six ASEAN (ASEAN: Association of Southeast Asian Nations) countries, namely, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, over the 1996-2015 period.
The study uses alternative panel data methods, including pooled mean group, mean group and dynamic fixed-effect estimators.
The results indicate that gross domestic product (GDP), interest rate, exchange rate, money supply and inflation rate are the most important macroeconomic factors explaining the trends of cross-border mergers and acquisition outflows of the ASEAN-6 countries. Specifically, GDP, money supply and inflation rate have significant positive relationships with acquisition outflows, while interest rate and exchange rate exert significant negative influence. On the other hand, the authors find four significant macroeconomic factors explaining the trends of the inward acquisitions. Essentially, GDP, money supply and inflation rate have significant positive impacts on inward acquisitions, while the impact of exchange rate is negatively significant.
Unavailability of data limits this study to pool six sample countries from ASEAN, instead of ten representative member countries.
The results of this study can signal to firms or investors, involving in cross-border mergers and acquisitions, where to direct foreign resources flows. Moreover, having the knowledge about the relative levels of market size and other macroeconomic factors in both home and host countries can be of great importance for investment decision. Therefore, policymakers of ASEAN countries should make appropriate macroeconomic policies that can stimulate inward and outward acquisitions.
The main contribution of this paper is that it is the first to present the analysis of macroeconomic influences on the trends of inward and outward merger and acquisition activities in six ASEAN countries.
1992 was the year of the Single European Market. By 31 December1992, agreement should have been reached on some 286 directives, whichaimed to dismantle physical, technical…
1992 was the year of the Single European Market. By 31 December 1992, agreement should have been reached on some 286 directives, which aimed to dismantle physical, technical and fiscal barriers to trade. In so doing, it was expected that community businesses would become more integrated, allowing them to compete on more equal terms as Eurobusinesses with the global players of the US and Japan. It was predicted that greater intra‐Community competition would be a necessary precursor of this outcome, and that this will lead to industries restructuring through mergers and joint ventures to increase market share and economies of scale by reaching a “minimum efficient size”. Examines the trends in cross‐border mergers/acquisitions and joint ventures for the period 1986 to 1989 and concludes that, for both small and large firms, such activity has increased. Further, an analysis of EC material on the subject reveals that firms′ reasons for such developments appear to have become more market‐oriented over time.
Acquiring a European company or, indeed, merging with one, arestrategies that are gaining favour with many organisations both withinand without the EC. The strategic…
Acquiring a European company or, indeed, merging with one, are strategies that are gaining favour with many organisations both within and without the EC. The strategic implications of such moves are examined and some methods of limiting the risks involved are suggested.
The Equal Pay Act 1970 (which came into operation on 29 December 1975) provides for an “equality clause” to be written into all contracts of employment. S.1(2) (a) of the 1970 Act (which has been amended by the Sex Discrimination Act 1975) provides:
The purpose of this paper is to determine the motives of cross-border mergers and acquisitions (M & A) by Indian companies for the period 1998 through 2009. The…
The purpose of this paper is to determine the motives of cross-border mergers and acquisitions (M & A) by Indian companies for the period 1998 through 2009. The study has also attempted to ascertain the post-merger paybacks realized by the sample acquirer companies. It also identifies the motives which help in improving the post-merger performance. The preference of the motives and post-merger paybacks realized across the development status of the host economy, age and industry of the company has also been found.
This paper uses a survey approach to collect the responses over the motives and post-merger paybacks. Statistical tools, namely, Likert scale, factor analysis, independent samples t-test and binary logistic regression have been used.
The study found that there are five motives of cross-border M & A – value creation, improvement in efficiency, market leadership, marketing and strategic motives and synergistic gains. The results also indicated that the acquirer firms expect cost and financial efficiency, stakeholders’ benefits and employee welfare post acquisition. The motive of value creation significantly improves the post-merger financial performance.
The study has only considered the cross-border M & A but not domestic M & A.
The research is an attempt to understand the dynamics which are responsible for motivating Indian companies to go abroad for acquisitions. Thus, it would help the prospective Indian acquirer companies to focus on the motives which help in improving the post-merger financial performance.
This research paper is original as it explores the motivation of Indian companies for entering into cross-border M & A. It adds to the extant literature of cross-border M & A by emerging economies multinational enterprises.
A distinction must be drawn between a dismissal on the one hand, and on the other a repudiation of a contract of employment as a result of a breach of a fundamental term of that contract. When such a repudiation has been accepted by the innocent party then a termination of employment takes place. Such termination does not constitute dismissal (see London v. James Laidlaw & Sons Ltd (1974) IRLR 136 and Gannon v. J. C. Firth (1976) IRLR 415 EAT).
Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination…
Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.