Crafting Corporate Success: Legal Roadmaps For Mergers And Amalgamations In The 21st Century

Ramesh Kumar Paswan, B.B.A. LL.B. (H.) Law College Dehradun, Uttaranchal University, Dehradun (Uttarakhand)

Dr. Lakshmi Priya Vinjamuri, Associate Professor, Law College Dehradun, Uttaranchal University, Dehradun (Uttarakhand)

ABSTRACT

This article takes a critical view of the landscape of both mergers and amalgamations under the Indian Companies Act 2013. It explores the strategic reasons behind the mergers and amalgamations, the legal framework within which the amalgamations take place and the historical evolution of the concept on the ground – all through cases. The article analyzes the structure of the process and points out the crucial role of the National Company Law Tribunal (NCLT), Competition Commission of India (CCI) etc, in this process. The corporates undertake to be in an active dialogue with the regulators and the unions. Their main stakeholder figures out their negotiating positions and often do not get what they want. Furthermore, the companies are willing to pay costs relating to the adjustment of the workers and clients – all this in addition to what is required by the law. For the minority shareholders, the amalgamation process would mean a loss of ownership of their shares; however, they get a similar quantum of shares in the new company. They realize that by working with the new large business, they have a chance to be a part of a large and economically efficient business in the future. The article enlightens the reader as to the strategic reasons, the legal underpinnings of corporate amalgamations and the historical evolution of those on the ground.

Keywords: Corporate Restructuring, National Company Law Tribunal, Competition Commission of India, mergers, shares, Amalgamations