Tag: Mergers and Acquisitions
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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
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SEBI Order on “Control” Under Takeover Regulations
Background and Facts Last week, SEBI passed its order in the Jet-Etihad case relating to whether the investment by Etihad Airways in 24% shares of Jet Airways (India) Limited and the terms thereof amount to Etihad obtaining “control” in Jet so as to require Etihad to make a mandatory open offer under the SEBI (Substantial
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Supreme Court on the Sanctity of a Takeover Offer
Background and Facts Last month, the Supreme Court had the occasion in SEBI v. Akshya Infrastructure Pvt. Ltd. to consider the narrow question of the whether “an open offer voluntarily made through a Public Announcement for purchase of shares of the target company can be permitted to be withdrawn at a time when the voluntary
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Further Tax Scrutiny of Mergers
In the last few years, mergers of companies (undertaken through schemes of arrangement that require the approval of the High Court) have been subject to greater scrutiny by the tax authorities. One example of a merger that was strongly objected to by the tax authorities is the case involving Vodafone Essar Gujarat Limited (discussed here),
