Participating Bonds Provide an Operational Solution to Finance the Process of Mergers and Acquisitions

Making decisins on mergers and acquisitions is one of the strategic decisions of top managers in different corporations. Mergers and acquisitions (M&A) are complex processes which have vast managerial, legal, financial, cultural, social and political outcomes and may lead to major increase in the wealth and quality of resource allocation. Researches show that achieving the penetration strategy in the market, implementing innovative programs, restructuring, reengineering the supply chain and creating shared service providing center are among the main objectives of mergers and acquisitions in different industries. The main problem here is the lack of access to reasonable and quick financial resources. Due to the expansion in mergers and acquisitions methods, it is necessary to create innovative financial instruments for them according to Islamic Sharia Principals. This study, by using descriptive- analytical method, has provided the structure of new Islamic financial instruments for the financing of mergers and acquisitions. Tenaghos sukuk has been introduced based on decreasing partnership (mosharakat) contract as a modern M&A financing method for the Iranian financial market.