The practice of mergers and acquisitions has attained considerable significance in the contemporary corporate scenario which is broadly used for reorganizing business entities. Indian industries were exposed to a plethora of challenges both nationally and internationally, since the introduction of Indian economic reform in 1991.
The cut-throat competition in the international market compelled the Indian firms to opt for mergers and acquisitions strategies, making it a vital premeditated option.
We, at ILG, have a panel of experts to devise a strategy and an M&A plan that reinforces that strategy. After an in-depth study of the companies’ financials and assimilating management’s objectives, we deliver a set of cost-effective options which also pave the way for long-term profitable growth.
We provide solutions within the legal framework for executing M&A transactions covering the entire gamut of procedure and regulations.
Mergers and acquisitions (M&A) in India are governed by the following legislation’s:
a. The Companies Act 2013
b. The Competition Act 2002
c. The Foreign Exchange Management Act 1999
d. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011
e. The Income Tax Act 1961
f. Indian Stamp Act 1899
g. Insolvency and Bankruptcy Code, 2016
Following government regulators and agencies play key roles in the process of merger and acquisition in India:
a. Registrar of Companies and Regional Director under Ministry of Corporate Affairs
b. National Company Law Tribunal (NCLT)
c. Competition Commission of India (CCI)
d. Securities and Exchange Board of India (SEBI)
e. Reserve Bank of India (RBI)
f. The Income Tax Department (ITD)
Documentation:
- Documents for obtaining approval from the Board of Directors and Shareholders of both the acquirer and the target company, wherever applicable
- Scheme/Petition to be filed before the concerned authority
- Notices to the shareholders and creditors
- Consent from the shareholders and creditors
- Notice to be published in a newspaper
- Public Announcement in case of acquisition of shares of a listed company
- Various affidavits, declarations, and other documents
- Share subscription/ purchase agreement
- Share Transfer form; and
- Reporting to stock exchanges in a prescribed format in case of a listed company, as applicable
Government charges/ fees (as applicable):
- Fee for filing merger petition before NCLT
- Share transfer stamp duty on consideration for the acquisition of shares where shares are held in physical form
- Fee payable to the Regional Director/ Registrar of Companies on filings the forms/ application
- Stamp duty on Share Purchase/Subscription agreement, Affidavits, merger order, etc. as applicable
- Fee payable to the notary for notarization of affidavits/ undertakings
Successful transaction management requires careful planning, execution, and compliance at every stage. We, at ILG, provide advisory to assess the situation and help our Client to put a strategy in place for approval of the government agencies and regulators.