Mechanics of Mergers & Acquisitions

1662 WordsApr 8, 20127 Pages
MECHANICS OF MERGERS & ACQUISITIONS Change is ubiquitous in contemporary society, and nowhere more so than in the operations of the large-scale, public corporation. Dramatic changes are underway, not only in the structure of corporate activity in areas such as the nature of work and the nature of organizational form, but also in the product and financial markets and the regulatory environment within which corporations operate. The depth and rapidity of these changes compel a reassessment of the ability of various governance structures to cope and adapt. Understanding this process will require not only an understanding of the nature of the changes that are underway, but also a reassessment of the paradigms of corporate governance and…show more content…
But things are not always as simple as they seem. The Companies Act, 1956 consolidates provisions relating to mergers and acquisitions and other related issues of compromises, arrangements and reconstructions (provisions of sections 391 to 394 of the Companies Act, 1956), however other provisions of the Companies Act get attracted at different times such as section 372 which provides for purchase by company of shares, etc., of other companies and in each case of merger and acquisition and the procedure remains far from straightforward. The process of mergers and acquisitions in India is court driven, long drawn and hence problematic. This process may be initiated through common agreements between the two parties, which in itself does not have an automatic legal cover to it. The sanction of the High Court is required for bringing it into effect. Even the regulatory regime i.e. the laws and Acts other than Companies Act, 1956, governing M&A in the Indian corporate scenario is, unfortunately, complex and straddles several areas of law and accounting, not
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