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The government has reportedly decided to simplify the norms for mergers and acquisitions, and that could pave way for fast track deal-making. The Economic Times reports that the government may exempt companies from seeking high court sanctions for M&As, if they meet certain criteria. The ministry of company affairs is apparently working on two types of fast-track clearances for M&As. One is ‘Contractual Mergers’, under which companies needn’t wait for the high court approval. Usually, a HC approval for merger take six months to come by.
This was a proposal suggested by a panel headed by corporate lawyer Shardul Shroff. Under the contractual merger plan, companies can decide to merge through a contract among themselves, which should be approved by the shareholders later. As of now, all private sector companies need to get the approval of high courts for M&A activities. The state-owned companies have to obtain the government approval.
The second proposal, reports ET, is a simplified procedure for M&As between group companies and unrelated private companies. Both are designed to make M&A on a fast-track mode. This should make companies relieved.