Contractual buyout - a legitimate growth model in the enterprise development: foundations and implications Online publication date: Sun, 10-Apr-2016
by K.S. Reddy; En Xie; Yuanyuan Huang
International Journal of Management and Enterprise Development (IJMED), Vol. 15, No. 1, 2016
Abstract: The paper develops a new strategy framework in the enterprise development, especially associated with loss-making firms. A legitimate growth model, contractual buyout is a 'collective ownership and joint administrative policy' in the market for corporate control and also provides an option to buy target firm in a given contract between acquirer, target firm and financier. It posits alike to socio-culture trend 'dating before marriage'. The strategy is further described as takeover defensive method, tax benefit scheme, foreign market entry mode and post-merger integration approach. The model is precisely discussed in various taxonomies, such as motivations, foundations, illustrations, guidelines and implications. It eventually recommends capitalists and multinational enterprises to choose CoBO as a potential entry mode to avail creative business openings in the world economy.
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