Tag: Mergers and Acquisitions
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“Make in India” frustrated by regulations “Made in India”
The Delisting Regulations applicable in India have been controversial since inception. Earlier this year, SEBI published a discussion paper seeking to review them. This Blog commented on the discussion paper here. Earlier this week, in my column in Business Standard, I wrote about how tinkering with the Delisting Regulations will not be of help. The…
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Paper on Squeeze Outs in India
Professor Vikramaditya Khanna and I have co-authored a working paper titled “Regulating Squeeze Outs in India: A Comparative Perspective” that is now available on SSRN. The abstract is as follows: Squeeze outs are both visible and palpable manifestations of a controlling shareholder’s raw power within the corporate machinery – the ability to openly force minority…
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SAT on Withdrawal of a Takeover Offer
Once an acquirer makes an open offer under the SEBI Takeover Regulations, it has to meet a high standard (somewhat similar to frustration) before it is allowed to withdraw such an offer. This principle has been laid down by the Supreme Court in two cases, i.e. Nirma Industries/ Shree Rama Multi Tech and Akshya Infrastructure/…
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Reverse Break Fees on Indian Transactions
Background; Concept Internationally, in negotiated mergers & acquisitions (M&A) transactions, it is customary to incorporate various types of deal protection devices in order to guard against a scenario where the deal falls through before it is completed and parties have in the meanwhile invested significant time and incurred costs. Two such deal protection devices that…
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Squeeze Outs: Analyzing the Cadbury Decision
[Professor Vikramaditya Khanna and I have co-authored the following post] Background In India, several transaction structures are available for controlling shareholders to squeeze out minority shareholders. These include the compulsory acquisition mechanism, scheme of arrangement and reduction of capital. Out of these, the most commonly used method is the reduction of capital. That is not…
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Comparative Paper on M&A: Transaction Structures, Law & Practice
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“Inversion” Takeovers
Standard treatises on mergers & acquisitions (M&A) contain the usual benefits or rationale for why a company would take over another. These include growth, size, synergies, and so on. One of the significant benefits of takeovers could also be tax synergies such as setting off the losses of one company against the losses of another.…
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Financing Domestic M&A
A Times of India report indicates that the Finance Ministry is considering a proposal to allow banks to finance domestic M&A, i.e. acquisitions of local targets by local acquirers. If this proposal goes through (although significant doubts have been raised regarding that), it will mark a sea-change in the funding of domestic M&A that is…
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Proposal to Overhaul Delisting Regime
Delisting of companies from the stock exchange (also known as privatization) has become a common phenomenon around the world, as it has in India. The rationale for delisting a company is detailed below: A number of reasons are proffered as motivations for delisting. Where there is a perception that the market price of the company…
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Regulatory Domain over M&A for NBFCs
The Reserve Bank of India (RBI) has issued a notification relating to mergers and acquisitions (M&A) involving non-banking finance companies (NBFCs). This now brings most M&As relating to NBFCs within the regulatory domain of the RBI thereby requiring its prior approval. The following types of transactions fall within the RBI approval requirement: 1. takeover or…
