Tag: Mergers and Acquisitions
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Takeover of Unlisted Companies: A New Route
[Posted by Umakanth Varottil] Squeeze out of minority shareholders of companies has been a controversial area. As a co-author and I had discussed, there are a number of methods by which squeeze outs can be effected in Indian companies. By way of a recent set of notification and rule-making efforts, the Ministry of Corporate Affairs…
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The Sun Pharma Orders: NCLT Confounds the Law on Cross-Border Demergers?
[Shinoj Koshy is a partner and Mayank Labh an associate at L&L Partners. The views expressed are personal and do not constitute legal advice. An earlier post on the topic is available here.] On 19 December 2019, the Ahmedabad bench of National Company Law Tribunal (“NCLT”) passed the order in which it rejected an application…
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NCLT Finds Cross-Border Demergers Impermissible under the Companies Act
[Posted by Umakanth Varottil] An important question arose before the National Company Law Tribunal (NLCT), Ahmedabad bench. Are only cross-border mergers and amalgamations permitted under section 234 of the Companies Act, 2013 (the “Act”), or does the provision also encompass cross-border demergers and other similar transactions? The NCLT answered that the scope of section 234…
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Schemes of Arrangement: Setting a Date
[Rudra Shankar is a fifth-year BA LLB (Hons.) student at Symbiosis Law School, Pune] The procedure for mergers and demergers of companies in India is governed by sections 230 to 232 of the Companies Act, 2013. Companies are required to approach the National Company Law Tribunal (NCLT) to obtain its sanction to such schemes of…
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Takeover Offer Price and the Valuation Conundrum
[Posted by Umakanth Varottil] Generally, in a takeover or other form of transaction involving mergers and acquisitions (M&A), there could be broadly two types of disputes. The first type arises if the companies involved have failed to comply with the requisite procedures for undertaking the transaction, which ultimately adversely affects the interests of the shareholders.…
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Power to Dispense with Meetings of Shareholders and Creditors in a Scheme of Arrangement
[Anirban Chanda is a 4th Year B.A., LL.B. Student at Jindal Global Law School. The author is grateful to Anujay Shrivastava for his inputs] For a very long time, there was an ambiguity regarding the National Company Law Tribunal’s (NCLT) power to dispense with the meetings of shareholders and creditors in an amalgamation or arrangement,…
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Mergers or Demergers involving Listed Transferor Companies and Unlisted Transferee Companies
[Aishwarya Singh is a lawyer based in Mumbai. The views expressed in the article are personal.] This post discusses the regulatory framework relating to mergers or demergers involving a listed company and an unlisted company, wherein the whole or part of the undertaking, property or liabilities of a listed company, being the transferor company, are…
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Recommendation of Independent Directors in a Takeover: Need for a Relook
[Shreya Goyal is a 4th student at the West Bengal National University of Juridical Sciences, Kolkata] The SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 govern the acquisition of shares in listed companies in India. These Regulations (and their predecessors) have been tested during many corporate takeover battles in India. In the recent takeover…
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MCA Clarifies “Appointed Date” in Schemes of Arrangement
[Posted by Umakanth Varottil] In schemes of arrangement, whether by way of a merger, demerger or other form of corporate restructuring, the timing of when the transaction takes effect becomes important. It is from such a date that the financial statements of the companies involved will reflect the effect of the transaction. Given that the…
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Buyback during Pendency of Amalgamation: SEBI Order in the Wipro Case
[Posted by Umakanth Varottil] The SEBI (Buy-back of Securities) Regulations, 2018 states in regulation 24(ii) that a company shall not announce a buy-back when a scheme of amalgamation or compromise or arrangement pursuant to the provisions of the Companies Act, 2013 is pending. Such a proscription against buy-back operates because a scheme of amalgamation is…