Hostile Takeovers In The Subcontinent Of India: Rarity Or Prevalence?

Arihant Jain & Aditya J. Hiremath, O.P Jindal Global University

ABSTRACT

This research paper explores the phenomenon of hostile takeovers within the Indian corporate landscape, aiming to determine whether they are a rarity or a more prevalent occurrence. Initiated by a discussion in a Company Law class at Jindal Global Law School, the study delves into the concept of hostile takeovers, contrasting them with friendly takeovers where consent of the target company's board is obtained. The paper conducts a thorough literature review, examines statutory mandates such as the Companies Act 2013 and SEBI Regulations, and analyzes notable case precedents to illustrate the regulatory and practical aspects of hostile takeovers in India. The analysis reveals that while hostile takeovers are relatively infrequent in India, notable instances such as the Reliance Industries' attempt on L&T Finance and L&T's acquisition of Mindtree underscore their occurrence and the legal complexities involved. Factors contributing to the rarity of hostile takeovers include concentrated shareholding structures, regulatory safeguards protecting minority shareholders, and cultural preferences for negotiated acquisitions. The paper concludes that despite these challenges, hostile takeovers remain feasible through strategic planning, shareholder engagement, and adherence to evolving legal frameworks. The study underscores the evolving nature of corporate governance in India and suggests avenues for future research in corporate finance and governance.