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Legal and Procedural Aspects of Merger

This document discusses the legal and procedural aspects of mergers in India. It begins with an introduction to mergers and acquisitions (M&As), noting they have become common for business restructuring worldwide. It then provides a brief history of M&As in India, outlines different types of mergers, and lists the key Indian laws governing mergers like the Companies Act and Competition Act. The document concludes by summarizing the typical procedure for a merger in India, from strategy to due diligence to closing the deal.

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Ankit Kumar (B.A. LLB 16)
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869 views

Legal and Procedural Aspects of Merger

This document discusses the legal and procedural aspects of mergers in India. It begins with an introduction to mergers and acquisitions (M&As), noting they have become common for business restructuring worldwide. It then provides a brief history of M&As in India, outlines different types of mergers, and lists the key Indian laws governing mergers like the Companies Act and Competition Act. The document concludes by summarizing the typical procedure for a merger in India, from strategy to due diligence to closing the deal.

Uploaded by

Ankit Kumar (B.A. LLB 16)
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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PRESENTATION SLIDES

CENTRAL UNIVERSITY OF SOUTH BIHAR


SCHOOL OF LAW AND GOVERNANCE
MERGER AND ACQUISITION

‘LEGAL AND PROCEDURAL ASPECTS OF MERGER’


by
ANKIT KUMAR
IX SEMESTER
BA LLB (H)
INTRODUCTION

• Mergers and Acquisitions (M&As) have emerged as a natural process of business restructuring throughout the
world.
• The early M&As in India were arranged either by the government agencies or by the financial institutions within
the framework of a regulated regime.
• The term ‘Merger’ is not defined under the Companies Act, 2013 or under Income Tax Act, 1961.
• ‘Merger’ is a combination of two or more entities into one; the desired effect being not just the accumulation of
assets and liabilities of the distinct entities, but organization of such entity into one business.
• This research paper attempts to focus on Legal and Procedural aspects of Merger by analysing the relevant legal
provisions and existing protocols in India.
HISTORY

• The Monopolies and Restrictive Trade Practices Act (MRTPA), 1969


curbed the natural process of Merger and Acquisition in India.
• With the advent of Liberalisation-Privatisation-Globalisation (LPG) in
Indian economy, M&A started becoming naturally occurring phenomena.
• The MRTPA though intended to be market reformatory by changing the
conduct of the firms through changing market structure, was viewed as
draconian and Competition Commission of India (CCI) was set up in 2002
as per the provisions of The Competition Act, 2002.
Horizontal Vertical Congeneric
Mergers Mergers Mergers

TYPES OF MERGER

Conglomerate Triangular
Mergers Mergers
Cash Mergers
M&A LAWS IN INDIA

Companies Act, 1956 Competition Act, 2002

• Section 108 A- 108 F • Section 5


• Section 390- 396 • Section 6

SEBI (Substantial
Acquisition of Shares and
Income Tax Act, 1961
Takeovers) Regulations,
1997
PROCEDURE OF MERGER

Determination of business plans


Finding out financial constraints
Developing a summary profile of the acquiring company
Preliminary valuation
Rating of acquisition candidates on the basis of their impact on business and ranking them accordingly
Merger and Acquisition
Review and approve the strategy
Strategy Process

• Identify potential segments


• Developing a list of targets
• Growing a Business by merger or acquisition
Target Identification • Prioritize targets
Strategies

Continue……….
Information Exchange

Valuation and Synergies

Offer and Negotiation

Due Diligence

Purchase Agreement

Deal closure and integration


CONCLUSIO
N
• Mergers and Acquisitions are business and financial processes, undertaken by several companies intending to reach heights of
success.
• Laws related to mergers and acquisitions are framed in order to promote an equal and just opportunity for companies to
undergo amalgamations of any kind.
• The Companies Act, 1956 and 2013, The Competition Act 2002, SEBI ‘s (SAST) Regulations, Income-Tax Act 1961, Foreign
Exchange and Management Act, 1999, Intellectual Property rights due diligence and Stamp duty are certain provisions to be
followed during mergers and acquisitions.
• Laws are doing their bit to safeguard the rights of the employees and all the stakeholders of a company who are involved in
mergers, but there is still a scope to improve these laws.

THE END

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