Chaitanya Nikhil Vaidya, ILS Law College
Introduction
In the present age, dynamic industry Companies strive to achieve stability and growth in the market. Mergers and Acquisitions is a key strategy utilized by companies in the corporate world to achieve growth and obtain stability. Intellectual Property and Mergers and Acquisitions are two different areas of law, however, Intellectual Property plays a vital role during Mergers and Acquisitions. Since Intellectual property is an important part of the company asset, it plays a vital role during Mergers and Acquisitions. It is important to determine the exact legal status of the company’s Intellectual property and hence due diligence is an important process during Mergers and Acquisitions.
Mergers and Acquisitions are the consolidations of companies, although, ‘Mergers’ and ‘Acquisitions’ are two different things. ‘Merger’ is the combination of two or more companies into one. In a merger, two or more companies come together to form a new company. The formation of a new company takes place after mergers. An example of a merger in recent times is that of the telecom giants ‘Vodafone’ and ‘Idea’ coming together to form ‘Vodafone Idea Ltd’. ‘Acquisition takes place when one company takes over another and clearly establishes itself as the new owner or acquirer, the purchase is called acquisition. No new company is formed after the acquisition. The term “Acquisition” means when a company acquires the other company. Acquisitions mean when one entity takes control of another entity. Acquisition refers to the takeover of one company by another through purchasing its majority ownership. An ‘acquisition’ or ‘takeover’ is the purchase by one person, of controlling interest in the share capital or of all or substantially all of the assets and/or liabilities, of the target.
