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Abstract

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International Journal of Law and Management, vol. 57 no. 3
Type: Research Article
ISSN: 1754-243X

Article
Publication date: 30 August 2013

K. Srinivasa Reddy, Rajat Agrawal and Vinay Kumar Nangia

Does target firm shareholders excessively paid or adequately rewarded or stumpy compensated? To address this query, the study aims to remix valuation parameters for better…

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Abstract

Purpose

Does target firm shareholders excessively paid or adequately rewarded or stumpy compensated? To address this query, the study aims to remix valuation parameters for better combination of mixture so that it represents fair deal value in merger and acquisition (M&A) negotiation process. The purpose of the study is to redesign the existing valuation methods, craft new models and compare them to suggest perceptive guidelines for “valuation governance”.

Design/methodology/approach

This research reconstructs discounted cash flows (DCF) and net asset valuations (NAV), originate NRR‐APB approach, MCF‐RS and MCF‐ES and finally compare all seven methods for each select company in the respective industry/sector. Exclusively, estimating the forecasting hurdle rate (FHR) is a core competence of valuation process.

Findings

Among the valuation models, all seven methods for select companies have been reported diverse values, however NRR‐APB approach describe factual enterprise value for bargaining the value of target firm in structuring M&A deals.

Research limitations/implications

Due to petite sample, study has limited scope to validate the proposed conceptual models for valuation governance. Particularly, models have developed under the Indian accounting regulations, standards and reporting mechanism. Though, it can be practiced in other accounting standards on trail and error basis.

Practical implications

Valuation practitioners, governments, consultants, M&A advisory, market research and academia may implement these business valuation techniques, guidelines and implications in particular sector/industry to protect the interest of target firm shareholders and justify the consistent value for acquirer/bidding firm. Accordingly, stakeholders' interest could also be sheltered.

Originality/value

The paper intends to introduce NRR‐APB approach, MCF‐RS and MCF‐ES, reengineering DCF and NAV and compare these valuation methods on three companies each in select two industries, auto ancillary and hotels and resorts. Further, it would be adding a token of contribution to the notable area corporate finance. Hence, this article is the first study to argue on valuation governance and recommend state to enact immediately in India.

Details

International Journal of Commerce and Management, vol. 23 no. 3
Type: Research Article
ISSN: 1056-9219

Keywords

Abstract

Subject area

corporate policy and strategy – mergers and acquisitions.

Study level/applicability

Post graduation (MBA and other management degrees). It includes courses on Strategic Management, Business Environment and International Business.

Case overview

Markets are becoming highly connective, accessible and communicative and reaching maturity at a very high phase. Acquisition is a choice to enhance the emerging and diversified markets. This case paper presents insights on Vedanta – Cairn India cross-border acquisition deal in Indian oil and exploration industry. This case synchronizes the gap between strategic planning and outcome of actions. The study exclusively evidences the reaction of stocks of all attached parties against acquisition announcement and compares with market performance.

Expected learning outcomes

Strategic mapping of business negotiations, while in-organic choices, further the impact of economic, political, legal and regulatory factors on cross-border mergers and acquisitions (M&A), deliberate deal financing mechanism and leadership diplomacy. It proposes from the viewpoint of corporate in-organic alternatives and to strengthen the upcoming research field of strategy & policy.

Supplementary materials

Global M&A market, shareholding pattern, income statement and balance sheet of Cairn India Ltd, financial figures of Vedanta Resources, tabular data on stock and index performance, deal structure and teaching note.

Details

Emerald Emerging Markets Case Studies, vol. 1 no. 1
Type: Case Study
ISSN: 2045-0621

Keywords

Abstract

Subject area

International business – sell-off and joint venture.

Study level/applicability

This case is suitable for graduation and post graduation (BBA, MBA) and other management programs. The courses include multinational business environment and strategic management

Case overview

A significant increase in the Asian electronics business has created a global platform for international vendors and customers. Indeed, Chinese and Korean firms have become the foremost manufacturing and fabrication nucleus for electronic supplies in the world economy. In fact, it is an example of success from Asian emerging markets. This case presents the strategies of Asian rivals in the electronics business that shows both Bolipps and Canssonic redesigning and restructuring global tactics for long-term sustainable success in the given market. It also discusses the reasons behind their current mode of business and post-deal issues.

Expected learning outcomes

The case describes a way to impart managerial and leadership strategies from regular business operations happening in and around the world. Solely it focuses on designing inorganic choices such as sell-offs, joint ventures, shuffle and merging strategies through theory to application.

Supplementary materials

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

Article
Publication date: 3 October 2016

K.S. Reddy, En Xie and Yuanyuan Huang

Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper…

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Abstract

Purpose

Drawing attention to the significant number of unsuccessful (abandoned) cross-border merger and acquisition (M&A) transactions in recent years, the purpose of this paper is to analyze three litigated cross-border inbound acquisitions that associated with an emerging economy – India, such as Vodafone-Hutchison and Bharti Airtel-MTN deals in the telecommunications industry, and Vedanta-Cairn India deal in the oil and gas exploration industry. The study intends to explore how do institutional and political environments in the host country affect the completion likelihood of cross-border acquisition negotiations.

Design/methodology/approach

Nested within the interdisciplinary framework, the study adopts a legitimate method in qualitative research, that is, case study method, and performs a unit of analysis and cross-case analysis of sample cases.

Findings

The critical analysis suggests that government officials’ erratic nature and ruling political party intervention have detrimental effects on the success of Indian-hosted cross-border deals with higher bid value, listed target firm, cash payment, and stronger government control in the target industry. The findings emerge from the cross-case analysis of sample cases contribute to the Lucas paradox – why does not capital flow from rich to poor countries and interdisciplinary M&A literature on the completion likelihood of international takeovers.

Practical implications

The findings have several implications for multinational managers who typically involve in cross-border negotiations. The causes and consequences of sample cases would help develop economy firms who intend to invest in emerging economies. The study also offers some implications of M&A for telecommunications and extractive industries.

Originality/value

Although a huge amount of extant research investigates why M&A fail to create value to the shareholders during the public announcement and post-merger stages, there is a significant dearth of research on the causes and consequences of delayed or abandoned national and international deals. The paper fills this knowledge gap by discussing an in-depth cross-case analysis of Indian-hosted cross-border acquisitions.

Details

Journal of Organizational Change Management, vol. 29 no. 6
Type: Research Article
ISSN: 0953-4814

Keywords

Article
Publication date: 31 May 2013

K. Srinivasa Reddy, Vinay Kumar Nangia and Rajat Agrawal

It is worth mentioning that mergers and acquisitions (M&As) have become a popular vehicle for emerging‐markets firms to rapidly access new opportunities and market…

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Abstract

Purpose

It is worth mentioning that mergers and acquisitions (M&As) have become a popular vehicle for emerging‐markets firms to rapidly access new opportunities and market capabilities. Indeed, privatization and multi‐nationalization have given a greater shore up in raising global and domestic merger deals. Motivated by these factors, the purpose of this paper is to investigate “do mergers produce abnormal returns around the announcement; conversely, do they improve financial performance in the long‐run?”

Design/methodology/approach

The study applies earnings management approach (event study) to compute average abnormal returns (AAR) around the merger announcement for select Indian M&A cases. Further, accounting ratios are considered to assess the long‐run financial performance. Thereafter, t‐stat is applied for testing the proposed hypotheses. In particular, it has performed a later test to the means of financial ratios and variables for both services and manufacturing sectors in accounting ratios and cylinder models, respectively.

Findings

The select Indian M&A cases show superior performance during the post‐merger period for both manufacturing and services sectors, and observe a balance sheet improvement in the long‐run.

Research limitations/implications

Sample is one of the limitations to the study. Due to small sample of merger cases, this paper has limited scope to generalize the results. Hence, academic researchers may employ the suggested assessment (cylinder)‐models on a large sample.

Practical implications

The research work would help financial analysts, stockbrokers, M&A advisory and regulatory bodies while designing takeover and open offer policies.

Originality/value

This is an original contribution, which has developed new assessment (cylinder)‐models to examine the post‐merger long‐run financial performance of acquiring firms, especially sector‐wise evaluation.

Article
Publication date: 12 July 2011

K. Srinivasa Reddy, V.K. Nangia and Rajat Agarawal

The purpose of this paper is to investigate the literature and statistical data on the Indian takeover code cum open offers market and break up the historical changes in…

Abstract

Purpose

The purpose of this paper is to investigate the literature and statistical data on the Indian takeover code cum open offers market and break up the historical changes in takeover code into various phases for better understanding and decision making by mergers and acquisitions advisory, legal advisory, merchant bankers, investment bankers, business houses and academia.

Design/methodology/approach

The present study describes literature summary on takeover code and evaluates the growth phase of open offers through trend analysis with respect to amendments in Indian takeover code.

Findings

Since 14 years of takeover code presence in India, it evidences that there is an empirical support on growth phase in the open offers market.

Research limitations/implications

The study is developed on the basis of Indian takeover regulations and Securities and Exchange Board of India takeover code to wake up the public shareholding and regulatory bodies, by better conveyance of historical review at one place.

Originality/value

This study is the first of its kind, dividing the complete history of Indian takeover code into various phases for review and identifying the gaps for future research. Further, the paper investigates and finds various untouched facts and variables in both literature and statistical data on open offers.

Details

International Journal of Law and Management, vol. 53 no. 4
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 11 May 2015

Rakesh Arrawatia, Arun Misra and Varun Dawar

The study aims to investigate the relationship between competition and efficiency. Using bank-level data for Indian banks, relationship between competition and efficiency…

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Abstract

Purpose

The study aims to investigate the relationship between competition and efficiency. Using bank-level data for Indian banks, relationship between competition and efficiency is examined by applying the Granger causality test for the period 1996 to 2011.

Design/methodology/approach

Lerner Index is a measure of market power and is applied for estimation of competition. Data envelopment analysis technique is applied for measuring efficiency in the Indian banking system along with the Granger causality test to look at the relationship between competition and efficiency.

Findings

Results show an increasing trend for competition for the period 1996 to 2004, and after that there is fall in competitive levels. Granger causality tests show that competition positively effects efficiency and vice-versa.

Practical implications

This study gives an insight into the relationship between competition and efficiency, thus providing an alternative view to the structure–conduct–performance paradigm. An efficient banking system can positively impact the growth of an economy and, hence, competition and efficiency are important decision parameters for regulators and could help them in decision-making and policy formulation.

Originality/value

This study has covered more than 90 per cent of the banking assets for looking at competition and efficiency in the banking sector. Policymakers can try to improve competitive levels in banking so as to improve efficiency in the banking sector which can further help in developing the investment-savings cycle.

Details

International Journal of Law and Management, vol. 57 no. 3
Type: Research Article
ISSN: 1754-243X

Keywords

Article
Publication date: 17 November 2021

Shalini Menon, M. Suresh and R. Raghu Raman

The study has a two-fold purpose: first, to identify the enablers of partnering agility in higher education, and, second, to analyze the interplay between the enablers.

Abstract

Purpose

The study has a two-fold purpose: first, to identify the enablers of partnering agility in higher education, and, second, to analyze the interplay between the enablers.

Design/methodology/approach

Total interpretive structural modelling (TISM) was used to construct a theoretical model of partnering agility enablers, and cross-impact matrix multiplication applied to classification (MICMAC) analysis was used to rank and segregate the enablers into independent, autonomous, dependent and linkage zones on the basis of their driving and dependence power.

Findings

The study helped in identifying eight enablers that can be instrumental in driving partnering agility in higher education. According to the TISM model, clarity on roles and responsibilities of partners was found to be the most crucial and vital enabler followed by resource sharing.

Practical implications

The conceptual model provides a new direction on how to develop and strengthen higher education partnerships. The model has prioritized all the crucial enablers that the management can work around in order to drive partnering agility in higher education institutions.

Originality/value

Studies in the past have majorly focused on academia–industry partnerships. This research has tried to provide a comprehensive view of the enablers and the multidirectional interplay between the enablers that can facilitate partnerships between academia and industry, Indian and international universities, and academia and community.

Content available
Article
Publication date: 12 July 2011

Chris Gale

406

Abstract

Details

International Journal of Law and Management, vol. 53 no. 4
Type: Research Article
ISSN: 1754-243X

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