Joint Venture, Merger & Acquisition in India
Mergers and Acquisitions in India are governed by the Indian Companies Act, 1956, more particularly Sections 391 to 394. This Act consolidates provisions pertaining to mergers and acquisitions and other related issues of compromise, arrangements and reconstruction. Though mergers and acquisition may be initiated through agreements between the parties, the process remains largely court driven as the sanction of the concerned High Court is required for bringing such a merger/acquisition into effect.
Under the existing law in India, the scheme for merger and/ or acquisition or any such arrangement should be approved by a majority in number representing not less than 3/4th in value of shareholders/creditors present and voting during the General Body Meetings of the companies concerned. However, different courts in India follow different procedures of holding meetings of the creditors and shareholders or dispensing with the requirement of such meetings.
The Government has a role to play in this process and it acts through an Official Liquidator (OL) or the Regional Director of the Ministry of Company Affairs. After hearing all the concerned parties including shareholders, the concerned High Court approves Acquisition and Merger proposals.
Compared to Mergers and Acquisitions, Joint Venture arrangements are easier to set up under Indian law. Joint Venture companies can be formed by entering into a Joint Venture Agreement for incorporating a new company with equity participation of the joint venture parties or by picking up equity stakes in an existing company.
CLG Joint Venture, Merger & Acquisition Practice
- Merger and Acquisition Due Diligence
- Strategic Merger and Acquisition Plans/Studies
- Asset and share valuation services for Merger and Acquisition transactions
- Identification of suitable Merger and Acquisition Partners
- Negotiation and settlement of Merger and Acquisition transactions
- Risk Analysis, financial & business feasibility studies on potential Mergers and Acquisition partners
- Drafting, Vetting Memoranda of Understanding, Agreements, Board Resolutions, Shareholders’ Agreements etc. for documenting and executing Mergers and Acquisitions
- Representing Clients in Merger and Acquisition proceedings for necessary court clearance
- Consultancy services on Merger and Acquisition documentation issues
The following are some of the assignments handled by CLG on this front:-
- Drafted an Agreement for a Joint Venture between an Indian Company and a Pennsylvania based Company for the mining sector in India.
- Drafted and negotiated an Agreement between an Indian Company with an Israel-based company for manufacture of equipments/ machinery for setting up/installing/commissioning/operating Solar-Thermal Power Plants with Solarized Turbine Technology in India.
- Drafted a Joint Marketing Agreement between an Indian company and an Indonesia-based Company for jointly undertaking coal-mining, marketing and other related services in India.
- Drafted a Technical Collaboration Agreement between an Indian Patent holder and a Switzerland based company for the textile sector.
- Drafted a Tripartite Agreement involving an Indian company and two Israel-based corporations for manufacture of/and rendering other services relating to Battery Equalizer- chemical additive for batteries.
- Drafted an Agreement for a Joint Venture Company in Singapore between an Indian company and a Singapore-based company on 50:50 Equity Share basis.
- Vetted Joint Operation Agreements for hydrocarbon projects in Gabon and Libya.
- Vetted a Consortium Agreement between two Public Sector Units in India for the hydrocarbon sector.
- Negotiated and vetted a Joint Venture Agreement between a State Govt. Mining Corporation and a Private Party in India.
- Legal Advice on a Joint venture agreement between a Global major and two Indian Companies for forming a Non-Banking Financial Company in India.
- Legal Advice to an Italy-based company for setting up business in India through Joint Venture.
- Drafted, vetted and negotiated Shareholders’ Agreements, Stock Holders Agreements, Stock Purchase Agreements, Acquisition Agreements.
India with its booming economy has become a hotbed of Joint Ventures, Mergers and Acquisitions and CLG has been successfully rendering its services in facilitating such arrangements.
|
