Due diligence in M&A — types and key focus areas
Legal, financial, tax, commercial, HR, IT, environmental and secretarial — each builds a risk profile, identifies deal-breakers and informs warranties.
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Open offer thresholds under SEBI (SAST) Regulations, 2011
Triggered on acquisition of 25% or more voting rights, or any acquisition > 5% in a financial year by an existing holder of 25%-75%. Open offer for minimum 26%.
Buyback regulations — modes, conditions and timelines
Via tender offer or open market. Max 25% of paid-up capital + free reserves; debt-equity ≤ 2:1 post buy-back; cooling period of 1 year between buy-backs.
Scheme of Arrangement / Compromise under Sections 230-232 of the Companies Act, 2013
Court-supervised compromise / arrangement between company and members/creditors. NCLT sanction needed; approved by 3/4 in value of each class.
FEMA implications in cross-border M&A — inbound and outbound
Inbound: FDI routes apply; valuation as per DCF / SEBI norms. Outbound: ODI framework with 400% net-worth cap and Form FC. Cross-border mergers per RBI 2018 Regulations.
Difference between Friendly Takeover and Hostile Takeover
Friendly: with consent of target board; negotiated price, smooth integration. Hostile: bypassing the board via direct offer or proxy fight.