Tarushi Batra, University of Petroleum and Energy Studies (UPES)
I. INTRODUCTION
Merger and amalgamation is not new concept but it keeps on changing or keep on getting advanced according to changes in society, as before there was MRTP Act,1969 (Monopolies and Restrictive Trade Practices),this act included strict rules for merger and amalgamation which made it difficult for companies to merge as there was long process and many other factors, this Act was than replaced by Competition Act,2002 as globalization moment in India enhanced in 1991 and MRTP act was also repealed in 1991,Then competition act came into force and it’s Section 5 and 6 deals with combinations which means mergers , acquisitions and amalgamation, this act deals with merger and amalgamation because it’s main aim to regulate prohibition anti-competitive agreements which means if merger and amalgamations can create monopoly or can harm competition then they are against competition act, and are not allowed by CCI as mergers need to be approved by CCI. There are many types of mergers like horizontal merger, vertical merger, conglomerate, cross border mergers etc. In this Article we will focus on Cross-Border merger. The Foreign Exchange Management (Cross Border Merger), Regulations, 2018 (FEMA Regulations) give a definition for this type of merger cross- border merger to give clear Idea about it “Cross-border merger is a merger between an Indian and Foreign Company. Section 234 of Companies Act,2013 also deals with this type of merger and amalgamation it state that foreign company needs RBI approval to merge with Indian company ,this shows RBI plays Important role in cross-border mergers.
There are many laws other than Competition Act 2002, that deals or governs merger and acquisitions like Income tax act, 1961; Insolvency and Bankruptcy Code,2016 ; Transfer of property Act,1882 etc. Let us look at how these acts are important for governing Merger and Amalgamation:
1. Transfer of Property Act, 1882: When one company merger with other company it also involves transfer of immovable property and also transfer of ownership rights from one company to another so for this transfer TPA rules need to be followed, stamp duty and registration is also important concept in M&A TPA also deals with this aspect.
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