Tag: Mergers and Acquisitions
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Proposed Change in Takeover Rules: More than Just Satyam
A few days ago, when newspapers reported that SEBI was considering an exemption from the minimum pricing norms in the context of a potential takeover offer on Satyam, the obvious question arose as to how an exception can be made in respect of a single company, and that too one which has been the subject
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Recent amendment allowing additional 5% creeping acquisition for 55-75% slab – some issues
1) SEBI amended vide notification dated 30th October 2008 the Takeover Regulations Takeover to, in essence, permit an acquirer, with persons acting in concert with him, to increase his holding by 5% by acquiring additional shares or voting rights upto 5% through open market purchases or pursuant to buyback of shares by the target company.
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Tax Implications of Demergers
(The following post is contributed by Mihir Naniwadekar) Generally, the gains arising from a demerger are exempt from capital gains tax, while those arising from a slump sale are not. But, then, what exactly is a ‘demerger’ for the purposes of the exemption from capital gains tax? Can a demerger ever be characterized as a
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Cross-Border Mergers
Under the present provisions of Sections 391-394 of the Companies Act, 1956 it is possible for a foreign company to merge with an Indian company, but an Indian company cannot be merged with a foreign company. This is intended to ensure that the company that continues after the merger is an Indian company over which
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Squeezing Out the Minority: Is it a Viable Option?
Although most jurisdictions confer powers on controlling (or majority) shareholders to squeeze out minority shareholders, the position under Indian company law does not appear to be all that straightforward. There exists a powerful provision in the form of Section 395 of the Companies Act, 1956 that allows controlling shareholders, in certain circumstances, to compel minority
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Promoters’ Contribution: SAT Ruling in the Reliance Power Case
A few days ago, the Securities Appellate Tribunal (SAT) passed its order in the Reliance Power IPO Case. This is on an appeal from the decision of SEBI (that we had posted about earlier on this blog). I thank one of our readers who sent in a review of the SAT decision, which I reproduce
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The True Nature of a Stock Swap
A stock swap is a transaction where an acquirer acquires shares of another company and, instead of paying cash for such acquisition, discharges consideration by issuance of its own shares. Business World has surveyed experts on the question as to whether a stock swap amounts to a “sale”. The response is as follows: Yes :
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Competition Commission & Global Mergers
There has been a coordinated and consistent move by industry to ensure that merger regulations that have been proposed by the Competition Commission do not cover global mergers whose implications in India are not substantial. We have discussed this issue in the past on this blog (here, here and here). In fact, the draft regulations
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Vodafone Income Tax Case
The acquisition of shares in Hutch Essar by Vodafone from Hutchison in a multi-billion dollar M&A deal last year has resulted in a dispute on the taxability of capital gains on the transaction. This dispute is currently pending before the Bombay High Court, with a decision being awaited. The court’s verdict is expected to have
