Analyzing the Hierarchical Structure of Enablers Affecting Indian Banks’ Merger and Acquisition Financing Decisions

Abstract

Mergers and acquisitions have been important means of company expansion, restructuring, and diversification. In mergers and acquisitions, Indian banks play a critical role. The study aimed to discover, determine, and create an empirical model that evaluates the interdependence and interaction of enablers. Through literature and unstructured interviews, 10 enablers influencing Indian banks’ financing decisions for merger and acquisition transactions were identified. Total interpretive structural modelling (TISM) and the Matrice d’Impacts Croisés Multiplication Appliqués à un Classement (MICMAC) technique establish the relationship between identified enablers. Governance and regulatory framework, political stability, and economic stability are major independent enablers for financing mergers and acquisitions. Transparency and disclosure, infrastructure, technical skills, and information communication technology act as linkage enablers for the participation of banks in merger and acquisition transactions. The study makes a novel contribution by identifying enablers through a literature search and ‘experts’ opinions. The TISM model determines the priority of the enablers by displaying hierarchical interconnection and dependency. This study reviews the literature to generalize the findings and focus on significant drivers for increased investment. To encourage merger and acquisition activity, practitioners must focus on elements with significant driving power. It will assist the practitioners, managers, and authorities in prioritizing their efforts.