M&A in India can be done by share purchase, asset or business transfer, or a merger or demerger scheme approved by the NCLT under Sections 230 to 232 of the Companies Act, 2013. Small companies and holding-subsidiary mergers can use the fast-track route under Section 233. Large deals may need Competition Commission approval, including under the deal value threshold, and listed or cross-border deals follow SEBI and FEMA rules.
Deal structures
| Structure | Key point |
|---|---|
| Share purchase | Buy shares; liabilities stay with company |
| Business transfer | Slump sale or itemised asset sale |
| Merger scheme | NCLT approval, creditor and shareholder meetings |
Approvals
- Board and shareholder approvals
- NCLT or Regional Director
- CCI for combinations above thresholds
- Sector regulators such as RBI or IRDAI
Process
- Term sheet and due diligence.
- Structure for tax and regulatory efficiency.
- Definitive agreements.
- Approvals and closing.
- Integration.
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Mergers meeting conditions can be tax-neutral; slump sales and share sales have capital gains implications.
Frequently asked questions
How long does an NCLT merger take?
Often several months to a year.
What is the deal value threshold?
CCI approval is required for transactions above a specified deal value where the target has substantial business operations in India.
What is a fast-track merger?
A simplified merger for small companies, startups and holding-wholly owned subsidiary combinations, approved by the Regional Director.
Is stamp duty payable on mergers?
Yes, state stamp duty applies to NCLT orders in many states.
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