| Pub. Date | : June' 2021 |
|---|---|
| Product Name | : The IUP Journal of Business Strategy |
| Product Type | : Article |
| Product Code | : IJBS20621 |
| Author Name | : Ananya Srinath and Jishnu J R |
| Availability | : YES |
| Subject/Domain | : Strategic Journals |
| Download Format | : PDF Format |
| No. of Pages | : 06 |
Mergers and Acquisitions (M&As) are used as an instrument of exponential growth by companies. Companies choose to merge for various reasons: to avoid the long gestation period of projects, for access to new markets and technology, for better economies of scale, etc. The Indian Companies Act, 2013 has been the new revelation in the M&A regime in India. Mergers have become tools of business strategy to not only gain strength and expand customer base but also for eliminating competition and tax liabilities, and to cover the losses of one company against the profits of another.1 In 2016, an alternative to the lengthy and time-consuming process for mergers was introduced under Section 233 of the Act. This paper aims to understand the concept of fast-track mergers and compare the procedures in India and Singapore. The paper also aims to comprehend if fast-track mergers will help overcome a plausible recession.
The Indian Companies Act, 1956 does not define the term "merger", however, the Companies Act, 2013 explains its meaning without explicitly defining it. A merger is a combination of two or more entities into one, where the goal is not only the accumulation of assets and liabilities of the distinct entities, but also reorganizing the entities into one business. The amended Act was drafted in the light of the significant changes in organizational structure and corporate restructuring activities that have occurred over time. However, the significant number of mergers contributed to a slow pace at which the process was sanctioned. This allowed to segue into easier and better avenues to carry out mergers.