Topic 7 - Provisions Regarding Mergers and Amalgamation Under Income Tax Act - Corporate Tax Planning

“Provisions regarding Mergers &
Amalgamation under Income Tax

Act”
by
Jyotsna Deolekar Roll No.3

Chinmay Dhurandhar Roll No.5
Gregory Dsouza Roll No.7
Ankit Ghadigaonkar Roll No.10
Satish Pawar Roll No.35
Nitin Shitole Roll No.46
Course: MFM (2017-20) Semester VI

Subject: Corporate Tax Planning
Prof: Mr. Ajay Sharma
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INDEX
Name of Topic Page No.
Executive Summary 3
Chapter 1.Introduction 3
Chapter 2.Provisions regarding Mergers and Acquisitions as per IT Act 6
-Merger and amalgamation of companies

-Merger or amalgamation of certain companies.
-Merger or amalgamation of company with foreign company.
-Merger or amalgamation of company with foreign company.
-Amalgamation, Merger or Division
-Regulation of combinations
Chapter 3.Case study on Acquisition of Flipkart by Walmart 18
-What Is an Acquisition Strategy

-Market Share of Flipkart and its Main Competitors
-About the Deal
-Deal is beneficial to both the parties
-Why did Walmart acquire Flipkart
-Reasons for the Deal: Walmart and Flipkart
-Tax Complexities of the Walmart-Flipkart Deal
-How Tax Treaties With US, Mauritius Will Affect Investors
-Walmart May Sell Part of Flipkart Stake To Other Investors
Chapter 4.Case study on Acquisition of Mindtree Ltd by L&T Infotech 28
-Overview
-Why is this a Hostile takeover
-About Mindtree
-Larson &Toubro Infotech
-Industry
-Reasons for the Acquisition
-How the acquisition was executed
-How the takeover has panned out till now
-How did L&T take over Mindtree
-How Mindtree acquisition will benefit L&T
-Defense strategies used by Mindtree to defend against hostile takeover
Chapter 5.Conclusion 38
Chapter 6.Bibliography 41
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Executive Summary
A business can be grown by an entrepreneur either by inner development or outside

development. It is observed that in the regular course of activity the firm rises slowly over a
span of time, also by acquiring new assets in the firm, replacing old technology equipment with
the new one, innovations of new products in case of inner development. But when the
successful corporate business is acquired the firm rises immediately in case of outside
expansion.
The corporate restructuring usually comprises of the groupings which are particularly the
Amalgamations, takeovers, mergers and acquisitions. A vital part is played by the outside
expansion in the number of top companies. Due to increasing competition in the market
outside expansion has become widespread, free access of capital over the boundaries, breach
of trade blocks.
With respect to rising exposure within the country and outside the country the Indian firms are
going for restructuring through takeovers and acquisitions. Mergers and acquisition is a tactical
choice taken by the Indian firms for expanding through marketing and production operations.
This tactics is extensively used in various fields such as Business Process Outsourcing,
Information Technology, etc… which was taken in order to enlarge the range of market, by
entering in new segment.
Introduction
Mergers and Amalgamations

Grouping of two or more agencies into one enterprise is a merger. 'Amalgamation' is also used
for merger. Amalgamation under The Income Tax Act, 1961 [Section 2(1A)] is define as the
blend of extra groups with every other or the combination of one or more extra organizations
to structure in new firm, in particular process that the property and borrowings of the merged
businesses come to be belongings and borrowings of merged organization and shareholders no
longer much in the merged company less than nine-tenth in terms of shares or organizations
turn out to be shareholders of the Amalgamated business enterprise.
Horizontal Mergers Also referred to as a ‘horizontal integration’, this kind of merger takes place
between entities engaged in competing businesses which are at the same stage of the industrial
process.2 A horizontal merger takes a company a step closer towards monopoly by eliminating
a competitor and establishing a stronger presence in the market. The other benefits of this
form of merger are the advantages of economies of scale and economies of scope. These forms
of merger are heavily scrutinized by the competition commission.
Vertical mergers refer to the combination of two entities at different stages of the industrial or
production process. For example, the merger of a company engaged in the construction
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business with a company engaged in production of brick or steel would lead to vertical
integration. Companies stand to gain on account of lower transaction costs and synchronization
of demand and supply. Moreover, vertical integration helps a company move towards greater
independence and self-sufficiency
Congeneric Mergers These are mergers between entities engaged in the same general industry
and somewhat interrelated, but having no common customer-supplier relationship. A company
uses this type of merger in order to use the resulting ability to use the same sales and
distribution channels to reach the customers of both businesses
Conglomerate Mergers A conglomerate merger is a merger between two entities in unrelated

industries. The principal reason for a conglomerate merger is utilization of financial resources,
enlargement of debt capacity, and increase in the value of outstanding shares by increased
leverage and earnings per share, and by lowering the average cost of capital. A merger with a
diverse business also helps the company to foray into varied businesses without having to incur
large start-up costs normally associated with a new business.
Cash Merger In a ‘cash merger’, also known as a ‘cash-out merger’, the shareholders of one
entity receives cash instead of shares in the merged entity. This is effectively an exit for the
cashed out shareholders
Triangular Merger A triangular merger is often resorted to, for regulatory and tax reasons. As
the name suggests, it is a tripartite arrangement in which the target merges with a subsidiary of
the acquirer. Based on which entity is the survivor after such merger, a triangular merger may
be forward (when the target merges into the subsidiary and the subsidiary survives), or reverse
(when the subsidiary merges into the target and the target survives).
Procedure under the Merger Provisions

Since a merger essentially involves an arrangement between the merging companies and their
respective shareholders, each of the companies proposing to merge with the other(s) must
make an application to the Company Court5 having jurisdiction over such company for calling
meetings of its respective shareholders and/or creditors. The Court may then order a meeting
of the creditors/shareholders of the company. If the majority in number representing 3/4th in
value of the creditors and shareholders present and voting at such meeting agrees to the
merger, then the merger, if sanctioned by the Court, is binding on all creditors/shareholders of
thecompany. The Merger Provisions constitute a comprehensive code in themselves, and under
these provisions Courts have full power to sanction any alterations in the corporate structure of
a company. For example, in ordinary circumstances a company must seek the approval of the
Court for effecting a reduction of its share capital. However, if a reduction of share capital
forms part of the corporate restructuring proposed by the company under the Merger
Provisions, then the Court has the power to approve and sanction such reduction in share
capital and separate proceedings for reduction of share capital would not be necessary
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Applicability of Merger Provisions to foreign companies Sections 230 to 234 of CA 2013
recognize and permit a merger/reconstruction where a foreign company merges into an Indian
company. Although the Merger Provisions do not permit an Indian company to merge into a
foreign company, the merger provisions under Section 234 of the CA 2013 do envisage this,
subject to rules made by the Government of India. However, neither is Section 234 currently in
force nor have any rules been formulated by the Government of India
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Provisions regarding Mergers and Acquisitions as per IT Act
Merger and amalgamation of companies.

232. (1) Where an application is made to the Tribunal under for the sanctioning of a compromise
or an arrangement proposed between a company and any such persons as are mentioned in
that section, and it is shown to the Tribunal”
(a) that the compromise or arrangement has been proposed for the purposes of, or in
connection with, a scheme for the reconstruction of the company or companies
involving merger or the amalgamation of any two or more companies; and
(b) that under the scheme, the whole or any part of the undertaking, property or liabilities
of any company (hereinafter referred to as the transferor company) is required to be
transferred to another company (hereinafter referred to as the transferee company),
or is proposed to be divided among and transferred to two or more companies,
the Tribunal may on such application, order a meeting of the creditors or class of creditors or
the members or class of members, as the case may be, to be called, held and conducted in such
manner as the Tribunal may direct and the provisions of sub-sections (3) to (6) of shall
apply mutatis mutandis.
(2) Where an order has been made by the Tribunal under sub-section (1), merging companies
or the companies in respect of which a division is proposed, shall also be required to circulate
the following for the meeting so ordered by the Tribunal, namely:”
(a) the draft of the proposed terms of the scheme drawn up and adopted by the directors
of the merging company;
(b) confirmation that a copy of the draft scheme has been filed with the Registrar;
(c) a report adopted by the directors of the merging companies explaining effect of
compromise on each class of shareholders, key managerial personnel, promotors and
non-promoter shareholders laying out in particular the share exchange ratio, specifying
any special valuation difficulties;
(d) the report of the expert with regard to valuation, if any;
(e) a supplementary accounting statement if the last annual accounts of any of the
merging company relate to a financial year ending more than six months before the
first meeting of the company summoned for the purposes of approving the scheme.
(3) The Tribunal, after satisfying itself that the procedure specified in sub-sections (1) and (2)
has been complied with, may, by order, sanction the compromise or arrangement or by a
subsequent order, make provision for the following matters, namely:”
(a) the transfer to the transferee company of the whole or any part of the undertaking,
property or liabilities of the transferor company from a date to be determined by the
parties unless the Tribunal, for reasons to be recorded by it in writing, decides
otherwise;
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(b) the allotment or appropriation by the transferee company of any shares, debentures,
policies or other like instruments in the company which, under the compromise or
arrangement, are to be allotted or appropriated by that company to or for any person:
Provided that a transferee company shall not, as a result of the compromise or
arrangement, hold any shares in its own name or in the name of any trust whether on
its behalf or on behalf of any of its subsidiary or associate companies and any such
shares shall be cancelled or extinguished;
(c) the continuation by or against the transferee company of any legal proceedings
pending by or against any transferor company on the date of transfer;
(d) dissolution, without winding-up, of any transferor company;
(e) the provision to be made for any persons who, within such time and in such manner as
the Tribunal directs, dissent from the compromise or arrangement;
(f) where share capital is held by any non-resident shareholder under the foreign direct
investment norms or guidelines specified by the Central Government or in accordance
with any law for the time being in force, the allotment of shares of the transferee
company to such shareholder shall be in the manner specified in the order;
(g) the transfer of the employees of the transferor company to the transferee company;
(h) where the transferor company is a listed company and the transferee company is an
unlisted company,”
(A) the transferee company shall remain an unlisted company until it becomes a
listed company;
(B) if shareholders of the transferor company decide to opt out of the transferee
company, provision shall be made for payment of the value of shares held by
them and other benefits in accordance with a pre-determined price formula
or after a valuation is made, and the arrangements under this provision may
be made by the Tribunal:
Provided that the amount of payment or valuation under this clause for any share shall
not be less than what has been specified by the Securities and Exchange Board under
any regulations framed by it;
(i) where the transferor company is dissolved, the fee, if any, paid by the transferor
company on its authorised capital shall be set-off against any fees payable by the
transferee company on its authorised capital subsequent to the amalgamation; and
(j) such incidental, consequential and supplemental matters as are deemed necessary to
secure that the merger or amalgamation is fully and effectively carried out:
Provided that no compromise or arrangement shall be sanctioned by the Tribunal unless a
certificate by the company's auditor has been filed with the Tribunal to the effect that the
accounting treatment, if any, proposed in the scheme of compromise or arrangement is in
conformity with the accounting standards prescribed under .
(4) Where an order under this section provides for the transfer of any property or liabilities,
then, by virtue of the order, that property shall be transferred to the transferee company and
the liabilities shall be transferred to and become the liabilities of the transferee company and
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any property may, if the order so directs, be freed from any charge which shall by virtue of the
compromise or arrangement, cease to have effect.
(5) Every company in relation to which the order is made shall cause a certified copy of the order
to be filed with the Registrar for registration within thirty days of the receipt of certified copy
of the order.
(6) The scheme under this section shall clearly indicate an appointed date from which it shall be
effective and the scheme shall be deemed to be effective from such date and not at a date
subsequent to the appointed date.
(7) Every company in relation to which the order is made shall, until the completion of the
scheme, file a statement in such form and within such time as may be prescribed with the
Registrar every year duly certified by a chartered accountant or a cost accountant or a company
secretary in practice indicating whether the scheme is being complied with in accordance with
the orders of the Tribunal or not.
(8) If a transferor company or a transferee company contravenes the provisions of this section,
the transferor company or the transferee company, as the case may be, shall be punishable with
fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh
rupees and every officer of such transferor or transferee company who is in default, shall be
punishable with imprisonment for a term which may extend to one year or with fine which shall
not be less than one lakh rupees but which may extend to three lakh rupees, or with both.
Explanation.”For the purposes of this section,”
(i) in a scheme involving a merger, whereunder the scheme the undertaking, property and
liabilities of one or more companies, including the company in respect of which the
compromise or arrangement is proposed, are to be transferred to another existing
company, it is a merger by absorption, or where the undertaking, property and
liabilities of two or more companies, including the company in respect of which the
compromise or arrangement is proposed, are to be transferred to a new company,
whether or not a public company, it is a merger by formation of a new company;
(ii) references to merging companies are in relation to a merger by absorption, to the
transferor and transferee companies, and, in relation to a merger by formation of a
new company, to the transferor companies;
(iii) a scheme involves a division, whereunder the scheme the undertaking, property and
liabilities of the company in respect of which the compromise or arrangement is
proposed are to be divided among and transferred to two or more companies each of
which is either an existing company or a new company; and
(iv) property includes assets, rights and interests of every description and liabilities include
debts and obligations of every description.
Merger or amalgamation of certain companies.

233. (1) Notwithstanding the provisions of and , a scheme of merger or amalgamation may be
entered into between two or more small companies or between a holding company and its
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wholly-owned subsidiary company or such other class or classes of companies as may be
prescribed, subject to the following, namely:”
(a) a notice of the proposed scheme inviting objections or suggestions, if any, from the
Registrar and Official Liquidators where registered office of the respective companies
are situated or persons affected by the scheme within thirty days is issued by the
transferor company or companies and the transferee company;
(b) the objections and suggestions received are considered by the companies in their
respective general meetings and the scheme is approved by the respective members
or class of members at a general meeting holding at least ninety per cent of the total
number of shares;
(c) each of the companies involved in the merger files a declaration of solvency, in the
prescribed form, with the Registrar of the place where the registered office of the
company is situated; and
(d) the scheme is approved by majority representing nine-tenths in value of the creditors
or class of creditors of respective companies indicated in a meeting convened by the
company by giving a notice of twenty-one days along with the scheme to its creditors
for the purpose or otherwise approved in writing.
(2) The transferee company shall file a copy of the scheme so approved in the manner as may
be prescribed, with the Central Government, Registrar and the Official Liquidator where the
registered office of the company is situated.
(3) On the receipt of the scheme, if the Registrar or the Official Liquidator has no objections or
suggestions to the scheme, the Central Government shall register the same and issue a
confirmation thereof to the companies.
(4) If the Registrar or Official Liquidator has any objections or suggestions, he may communicate
the same in writing to the Central Government within a period of thirty days:
Provided that if no such communication is made, it shall be presumed that he has no objection
to the scheme.
(5) If the Central Government after receiving the objections or suggestions or for any reason is
of the opinion that such a scheme is not in public interest or in the interest of the creditors, it
may file an application before the Tribunal within a period of sixty days of the receipt of the
scheme under sub-section (2) stating its objections and requesting that the Tribunal may
consider the scheme under .
(6) On receipt of an application from the Central Government or from any person, if the
Tribunal, for reasons to be recorded in writing, is of the opinion that the scheme should be
considered as per the procedure laid down in , the Tribunal may direct accordingly or it may
confirm the scheme by passing such order as it deems fit:
Provided that if the Central Government does not have any objection to the scheme or it does
not file any application under this section before the Tribunal, it shall be deemed that it has no
objection to the scheme.
(7) A copy of the order under sub-section (6) confirming the scheme shall be communicated to
the Registrar having jurisdiction over the transferee company and the persons concerned and
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the Registrar shall register the scheme and issue a confirmation thereof to the companies and
such confirmation shall be communicated to the Registrars where transferor company or
companies were situated.
(8) The registration of the scheme under sub-section (3) or sub-section (7) shall be deemed to
have the effect of dissolution of the transferor company without process of winding up.
(9) The registration of the scheme shall have the following effects, namely:”
(a) transfer of property or liabilities of the transferor company to the transferee company
so that the property becomes the property of the transferee company and the liabilities
become the liabilities of the transferee company;
(b) the charges, if any, on the property of the transferor company shall be applicable and
enforceable as if the charges were on the property of the transferee company;
(c) legal proceedings by or against the transferor company pending before any court of
law shall be continued by or against the transferee company; and
(d) where the scheme provides for purchase of shares held by the dissenting shareholders
or settlement of debt due to dissenting creditors, such amount, to the extent it is
unpaid, shall become the liability of the transferee company.
(10) A transferee company shall not on merger or amalgamation, hold any shares in its own
name or in the name of any trust either on its behalf or on behalf of any of its subsidiary or
associate company and all such shares shall be cancelled or extinguished on the merger or
amalgamation.
(11) The transferee company shall file an application with the Registrar along with the scheme
registered, indicating the revised authorised capital and pay the prescribed fees due on revised
capital:
Provided that the fee, if any, paid by the transferor company on its authorised capital prior to
its merger or amalgamation with the transferee company shall be set-off against the fees
payable by the transferee company on its authorised capital enhanced by the merger or
amalgamation.
(12) The provisions of this section shall mutatis mutandis apply to a company or companies
specified in sub-section (1) in respect of a scheme of compromise or arrangement referred to
in or division or transfer of a company referred to clause (b) of sub-section (1) of .
(13) The Central Government may provide for the merger or amalgamation of companies in
such manner as may be prescribed.
(14) A company covered under this section may use the provisions of for the approval of any
scheme for merger or amalgamation.
Merger or amalgamation of company with foreign company.
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234. (1) The provisions of this Chapter unless otherwise provided under any other law for the
time being in force, shall apply mutatis mutandis to schemes of mergers and amalgamations
between companies registered under this Act and companies incorporated in the jurisdictions
of such countries as may be notified from time to time by the Central Government:
Provided that the Central Government may make rules, in consultation with the Reserve Bank
of India, in connection with mergers and amalgamations provided under this section.
(2) Subject to the provisions of any other law for the time being in force, a foreign company,
may with the prior approval of the Reserve Bank of India, merge into a company registered
under this Act or vice versa and the terms and conditions of the scheme of merger may provide,
among other things, for the payment of consideration to the shareholders of the merging
company in cash, or in Depository Receipts, or partly in cash and partly in Depository Receipts,
as the case may be, as per the scheme to be drawn up for the purpose.
Explanation.”For the purposes of sub-section (2), the expression "foreign company" means any
company or body corporate incorporated outside India whether having a place of business in
India or not.
Liability of officers in respect of offences committed prior to merger, amalgamation, etc.

240. Notwithstanding anything in any other law for the time being in force, the liability in
respect of offences committed under this Act by the officers in default, of the transferor
company prior to its merger, amalgamation or acquisition shall continue after such merger,
amalgamation or acquisition.
Amortisation of expenditure in case of amalgamation or demerger. - Section - 35DD, Income-

tax Act, 1961-2019 (No. 2)
35DD. (1) Where an assessee, being an Indian company, incurs any expenditure, on or after the
1st day of April, 1999, wholly and exclusively for the purposes of amalgamation or demerger of
an undertaking, the assessee shall be allowed a deduction of an amount equal to one-fifth of
such expenditure for each of the five successive previous years beginning with the previous year
in which the amalgamation or demerger takes place.
(2) No deduction shall be allowed in respect of the expenditure mentioned in sub-section (1)
under any other provision of this Act.
Conditions prohibiting reconstruction or amalgamation of company.

376. Where any provision in the memorandum or articles of a company, or in any resolution
passed in general meeting by, or by the Board of Directors of the company, or in an agreement
between the company and any other person, whether made before or after the
commencement of this Act, prohibits the reconstruction of the company or
its amalgamation with anybody corporate or bodies corporate, either absolutely or except on
the condition that the managing director or manager of the company is appointed or
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reappointed as managing director or manager of the reconstructed company or of the body
resulting from amalgamation, as the case may be, shall become void with effect from the
commencement of this Act, or be void, as the case may be.
AMALGAMATION, MERGER OR DIVISION

Amalgamation, merger or division, etc., to form new Producer Companies.
581ZN.(1) A Producer Company may, by a resolution passed at its general meeting,—
(a ) decide to transfer its assets and liabilities, in whole or in part, to any other Producer
Company, which agrees to such transfer by a resolution passed at its general meeting,
for any of the objects specified in ;
(b ) divide itself into two or more new Producer Companies.
(2) Any two or more Producer Companies may, by a resolution passed at any general or special
meetings of its Members, decide to—
(a ) amalgamate and form a new Producer Company; or
(b ) merge one Producer Company (hereafter referred to as "merging company") with
another Producer Company (hereafter referred to as "merged company").
(3) Every resolution of a Producer Company under this section shall be passed at its general
meeting by a majority of total members, with right of vote not less than two-thirds of its
Members present and voting and such resolution shall contain all particulars of the transfer of
assets and liabilities, or division, amalgamation, or merger, as the case may be.
(4) Before passing a resolution under this section, the Producer Company shall give notice
thereof in writing together with a copy of the proposed resolution to all the Members and
creditors who may give their consent.
(5) Notwithstanding anything contained in articles or in any contract to the contrary, any
Member, or any creditor not consenting to the resolution shall, during the period of one month
of the date of service of the notice on him, have the option,—
(a ) in the case of any such Member, to transfer his shares with the approval of the Board
to any active Member thereby ceasing to continue as a Member of that company; or
(b ) in the case of a creditor, to withdraw his deposit or loan or advance, as the case may
be.
(6) Any Member or creditor, who does not exercise his option within the period specified in
sub-section (5), shall be deemed to have consented to the resolution.
(7) A resolution passed by a Producer Company under this section shall not take effect until the
expiry of one month or until the assent thereto of all the Members and creditors has been
obtained, whichever is earlier.
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(8) The resolution referred to in this section shall provide for—
(a ) the regulation of conduct of the Producer Company’s affairs in the future;
(b ) the purchase of shares or interest of any Members of the Producer Company by other
Members or by the Producer Company;
(c ) in the case of purchase of shares of one Producer Company by another Producer
Company, the consequent reduction of its share capital;
(d ) termination, setting aside or modification of any agreement, howsoever arrived
between the company on the one hand and the directors, secretaries and manager
on the other hand, apart from such terms and conditions as may, in the opinion of the
majority of shareholders, be just and equitable in the circumstances of the case;
(e ) termination, setting aside or modification of any agreement between the Producer
Company and any person not referred to in clause (d ):
Provided that no such agreement shall be terminated, set aside or modified except
after giving due notice to the party concerned:
Provided further that no such agreement shall be modified except after obtaining the
consent of the party concerned;
(f ) the setting aside of any transfer, delivery of goods, payment, execution or other act
relating to property, made or done by or against the Producer Company within three
months before the date of passing of the resolution, which would if made or done
against any individual, be deemed in his insolvency to be a fraudulent preference;
(g ) the transfer to the merged company of the whole or any part of the undertaking,
property or liability of the Producer Company;
(h ) the allotment or appropriation by the merged company of any shares, debentures,
policies, or other like interests in the merged company;
(i ) the continuation by or against the merged company of any legal proceedings pending
by or against any Producer Company;
(j ) the dissolution, without winding up, of any Producer Company;
(k ) the provision to be made for the Members or creditors who make dissent;
(l ) the taxes if any, to be paid by the Producer Company;
(m ) such incidental, consequential and supplemental matters as are necessary to secure
that the division, amalgamation or merger shall be fully and effectively carried out.
(9) When a resolution passed by a Producer Company under this section takes effect, the
resolution shall be a sufficient conveyance to vest the assets and liabilities in the transferee.
(10) The Producer Company shall make arrangements for meeting in full or otherwise satisfying
all claims of the Members and the creditors who exercise the option, within the period
specified in sub-section (4), not to continue as the Member or creditor, as the case may be.
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(11) Where the whole of the assets and liabilities of a Producer Company are transferred to
another Producer Company in accordance with the provisions of sub-section (9), or where there
is merger under sub-section (2), the registration of the first mentioned Company or the merging
company, as the case may be, shall stand cancelled and that Company shall be deemed to have
been dissolved and shall cease to exist forthwith as a corporate body.
(12) Where two or more Producer Companies are amalgamated into a new Producer Company
in accordance with the provisions of sub-section (2) and the Producer Company so formed is
duly registered by the Registrar, the registration of each of the amalgamating companies shall
stand cancelled forthwith on such registration and each of the Companies shall thereupon
cease to exist as a corporate body.
(13) Where a Producer Company divides itself into two or more Producer Companies in
accordance with the provisions of clause (b) of sub-section (1) and the new Producer
Companies are registered in accordance with the provisions of sub-section (8), the registration
of the erstwhile Producer Company shall stand cancelled forthwith and that Company shall be
deemed to have been dissolved and cease to exist as a corporate body.
(14) The amalgamation, merger or division of companies under the foregoing sub-sections shall
not in any manner whatsoever affect the pre-existing rights or obligations and any legal
proceedings that might have been continued or commenced by or against any erstwhile
company before the amalgamation, merger or division, may be continued or commenced by, or
against, the concerned resulting company, or merged company, as the case may be.
(15) The Registrar shall strike off the names of every Producer Company deemed to have been
dissolved under sub-sections (11) to (14).
(16) Any member or creditor or employee aggrieved by the transfer of assets, division,
amalgamation or merger may, within thirty days of the passing of the resolution, prefer an
appeal to the High Court.
(17) The High Court shall, after giving a reasonable opportunity to the person concerned, pass
such orders thereon as it may deem fit.
(18) Where an appeal has been filed under sub-section (16), the transfer of assets, division,
amalgamation or merger of the Producer Company shall be subject to the decision of the High
Court.
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E.—Amalgamation and demerger of shipping companies
Amalgamation.
115VY.Where there has been an amalgamation of a company with another company or
companies, then, subject to the other provisions of this section, the provisions relating to the
tonnage tax scheme shall, as far as may be, apply to the amalgamated company if it is a
qualifying company:
Provided that where the amalgamated company is not a tonnage tax company, it shall exercise
an option for tonnage tax scheme under sub-section (1) of section 115VP within three months
from the date of the approval of the scheme of amalgamation:
Provided further that where the amalgamating companies are tonnage tax companies, the
provisions of this Chapter shall, as far as may be, apply to the amalgamated company for such
period as the option for tonnage tax scheme which has the longest unexpired period continues
to be in force:
Provided also that where one of the amalgamating companies is a qualifying company as on
the 1st day of October, 2004 and which has not exercised the option for tonnage tax scheme
within the initial period, the provisions of this Chapter shall not apply to the amalgamated
company and the income of the amalgamated company from the business of operating
qualifying ships shall be computed in accordance with the other provisions of this Act.
Regulation of combinations
Combination .
5. The acquisition of one or more enterprises by one or more persons or merger or
amalgamation of enterprises shall be a combination of such enterprises and persons or
enterprises, if”
(a) any acquisition where”
(i) the parties to the acquisition, being the acquirer and the enterprise, whose
control, shares, voting rights or assets have been acquired or are being
acquired jointly have,”
(A) either, in India, the assets of the value of more than rupees one
thousand crores or turnover more than rupees three thousand
crores; or
[ (B) in India or outside India, in aggregate, the assets of the value of more
than five hundred million US dollars, including at least rupees five
hundred crores in India, or turnover more than fifteen hundred
million US dollars, including at least rupees fifteen hundred crores in
India; or ]
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(ii) the group, to which the enterprise whose control, shares, assets or voting rights have
been acquired or are being acquired, would belong after the acquisition, jointly have
or would jointly have,”
(A) either in India, the assets of the value of more than rupees four thousand
crores or turnover more than rupees twelve thousand crores; or
[ (B) in India or outside India, in aggregate, the assets of the value of more than two
billion US dollars, including at least rupees five hundred crores in India, or
turnover more than six billion US dollars, including at least rupees fifteen
hundred crores in India; or ]
(b) acquiring of control by a person over an enterprise when such person has already direct
or indirect control over another enterprise engaged in production, distribution or
trading of a similar or identical or substitutable goods or provision of a similar or
identical or substitutable service, if”
(i) the enterprise over which control has been acquired along with the enterprise
over which the acquirer already has direct or indirect control jointly have,”
(A) either in India, the assets of the value of more than rupees one
crores; or
India; or ]
(ii) the group, to which enterprise whose control has been acquired, or is being
acquired, would belong after the acquisition, jointly have or would jointly
have,”
(A) either in India, the assets of the value of more than rupees four
thousand crores or turnover more than rupees twelve thousand
crores; or
than two billion US dollars, including at least rupees five hundred
crores in India, or turnover more than six billion US dollars, including
at least rupees fifteen hundred crores in India; or ]
(c) any merger or amalgamation in which”
(i) the enterprise remaining after merger or the enterprise created as a result of
the amalgamation, as the case may be, have,”
(A) either in India, the assets of the value of more than rupees one
crores; or
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India; or ]
(ii) the group, to which the enterprise remaining after the merger or the
enterprise created as a result of the amalgamation, would belong after
the merger or the amalgamation, as the case may be, have or would have,”
(A) either in India, the assets of the value of more than rupees four
thousand crores or turnover more than rupees twelve thousand
crores; or
than two billion US dollars, including at least rupees five hundred
crores in India, or turnover more than six billion US dollars, including
at least rupees fifteen hundred crores in India. ]
Explanation.”For the purposes of this section,”
(a) control• includes controlling the affairs or management by”
(i) one or more enterprises, either jointly or singly, over another enterprise or
group;
(ii) one or more groups, either jointly or singly, over another group or enterprise;
(b) group• means two or more enterprises which, directly or indirectly, are in a position
to”
(i) exercise twenty-six per cent or more of the voting rights in the other
enterprise; or
(ii) appoint more than fifty per cent of the members of the board of directors in
the other enterprise; or
(iii) control the management or affairs of the other enterprise;
(c) the value of assets shall be determined by taking the book value of the assets as shown,
in the audited books of account of the enterprise, in the financial year immediately
preceding the financial year in which the date of proposed merger falls, as reduced by
any depreciation, and the value of assets shall include the brand value, value of
goodwill, or value of copyright, patent, permitted use, collective mark, registered
proprietor, registered trade mark, registered user, homonymous geographical
indication, geographical indications, design or layout-design or similar other
commercial rights, if any, referred to in sub-section (5) of section 3.
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Case study on Acquisition of Flipkart by Walmart
Flipkart was the startup in the e-com industry for selling online goods by fellows from IIT. Flipkart was
funded by many funding giants internationally and it became an example for successful e-com startup.
Walmart is giant in the retail store with multinational presence and acquired many companies in
different regions of the world to operate and grab the market share to beat the competition.
The case study is running around the e-commerce and commerce like online and offline market with
competitor like Amazon and others. Two players Walmart and Flipkart have their strong position over
their respective places in terms of market capture and sales other side of the coin reflects the investors
who had put their money in the venture like Tiger Global, Softbank etc. the deal become biggest deal
due to strong presence of Amazon in the game.
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What Is an Acquisition Strategy?
The acquisition strategy is a comprehensive, integrated plan developed as part of acquisition planning
activities. It describes the business, technical, and support strategies to manage program risks and meet
program objectives. The strategy guides acquisition program execution across the entire program (or
system) life cycle. It defines the relationship between the acquisition phases and work efforts, and key
program events such as decision points, reviews, contract awards, test activities, production lot/delivery
quantities, and operational deployment objectives. The strategy evolves over time and should
continuously reflect the current status and desired end point of the program
Before entering in to any merger or acquisition deal, the target company's market performance and
market position is required to be examined thoroughly so that the optimal target company can be
chosen and the deal can be finalized at a right price.
In the deal of Walmart – Flipkart, it is a long term bet on the Indian market and a step ahead from
Amazon. Some strategic decisions are for long term, if we look at the current scenario the deal is big,
investors of Walmart are no so happy, there is a dip in the stocks of Walmart after the deal. But this is
not for the first time, Walmart has acquired many organization earlier to win the game.
Market Share of Flipkart and its Main Competitors
Flipkart ranks number one in various product categories such as mobile phones, e-fashion, large
appliances and number two in the sales of electronics. In products such as fashion clothing,
household electronics, appliances and other lifestyle products Amazon is next with a 31 percent
market share and a gross merchandise value of US$5 bn. Beyond the general trends, one needs
to assess whether competition exists at the disaggregated level. Earlier, there were many other
potential competitors in the market, such as eBay, Jabong, Myntra and so on. Many of them
have been taken over by Flipkart
Snapdeal was the second player in the market, which lost its market share substantially. By
adding Walmart’s products, Flipkart may further diversify its product portfolio, especially in
categories like grocery and food products which are currently absent and may compete with
Amazon in the newly added segments. The possibility of importing Walmart’s globally available
products has not been considered Snapdeal was the second player in the market, which lost its
market share substantially. By adding Walmart’s products, Flipkart may further diversify its
product portfolio, especially in categories like grocery and food products which are currently
absent and may compete with Amazon in the newly added segments. The possibility of
importing Walmart’s globally available products has not been considered
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Previous Acquisitions undertaken by Flipkart:
Flipkart has made 23 strategic acquisitions in various categories13 including Myntra, Jabong,
Letsbuy, PhonePe and so on. The acquisitions substantially increased the active consumer base
of Flipkart and strengthened its product profile, digital platform as well as product delivery so
that it is able to withstand competition. Despite being an Indian start-up, Flipkart could become
a strong competitor to Amazon because of these acquisitions. For example, before acquiring
Myntra in May 2014, Flipkart had only around 20 percent market share in fashion sales, which
increased to 50 percent, with the addition of 30 percent from Myntra14. Further, Flipkart made
another strategic move by acquiring Jabong through its subsidiary Myntra in July 2016, through
which the combined market share of Flipkart group in online fashion sales has become 70
percent, and it acquired a clear edge over Amazon and Snapdeal. Currently, Flipkart group is
holding the number one position in this segment. Flipkart allowed most of the targets to keep
their separate identities, it has placed key personnel on their boards.
About the Deal

➢ Walmart, the largest e-commerce giant acquired a controlling stake of 77% in Flipkart
(India’s largest e-commerce company by market share) by investing $16 Billion.
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➢ With the deal India will now have Walmart, Amazon and Paytm Mall as the key players
to compete in the Indian e-commerce market
➢ The deal will help Flipkart leverage Walmart’s omni-channel retail expertise and general
supply chain knowledge. Walmart aims to extend their B2B sales across India through
this acquisition.
➢ Walmart has a strong global physical presence in retail space but lacks in ecommerce.
This deal can spur their online presence in Indian markets.
➢ Both Flipkart and Walmart shall maintain separate brands and operating structures.
➢ A world’s largest mergers & acquisitions , which value the Indian ecommerce major at
$20.77 billion.
➢ Where Sachin Bansal co-founder of flipkart leaves his holding by selling its stake of 5.5-
6%
➢ Whereas Binny Bansal co- founder of flipkart will continue in Walmart flipkart group as
CEO
➢ This deal is a good news for the future e-com market and new startups to mark their
presence in the international and national market, many startups founded and some of
them are successful, and Flipkart is one of those successful Indian startup.
Deal is beneficial to both the parties
The Amazon Issue: Both these parties have one common competitor i.e. Amazon. Wal-Mart has
a significant history of competing with Amazon. At the present moment, Wal-Mart has
revenues and profits that are at least three times as large as Amazon. However, the market
capitalization of Amazon is still larger than Wal-Mart. This is because the market perceives
Amazon as an innovative company that will soon overtake Wal-Mart.
On the other hand, Wal-Mart is viewed as being defensive. This is because a large section of the
population is getting hooked on to online shopping and Amazon is the leader in online
shopping. Wal-Mart wants to create a presence. They are already struggling to create this
presence in the United States. This is the reason why they don’t want to start from scratch in a
promising market like India.
On the other hand, Flipkart is an established brand in the Indian consumer’s mind. However,
they do not have the financial strength to match the deep pockets of Amazon. This deal will,
therefore, benefit both parties. Wal- Mart will receive access to the fastest growing market in
the world. On the other hand, Flipkart will receive the funds that it needs to take on and defeat
Amazon.
Access to India: Wal-Mart has made attempts to enter Indian markets before. However, they
have not been able to access the market. This is because no government will allow mega
corporations like Wal-Mart to enter the market. It will be politically very unpopular to do so. To
circumvent this, Wal-Mart has tried becoming a minority partner in an offline venture with
Bharti Enterprises. However, that did not work out too well for Wal-Mart.
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Wal-Mart has now understood that it is unlikely for them to get a majority stake in any brick
and mortar retail store chain. Hence, they are going the online route. The partnership with
Flipkart gives them access to the Indian market. They also become the majority player with a
controlling stake in the organization. This is precisely what Wal-Mart wants which is why
Flipkart is the perfect match for them.
Weakening Support System: Up until now, Flipkart has only taken money from financial
investors like Tiger Global, Softbank, Temasek, etc. These funds have no interest in the long
term viability of the firm. The holding capacity of these funds is also less. These funds have to
return money to investors every few years. Hence, they are continuously worried about the IRR.
On the other hand, Wal-Mart is in it for the long term. They are willing to take losses early on if
required to stop the march of Amazon and cement Flipkart’s position in the market. Flipkart has
seen its valuation go down in successive rounds of funding. This is because investors are
reluctant to invest more money given Flipkart’s cash burn rate. The conclusion is that Flipkart
would have faced a shortage of funds had it relied only on financial investors. By roping in a
strategic investor, they are avoiding a future crisis.
Knowledge Sharing: Wal-Mart was facing a similar situation in the United States. The company
acquired Jet.com and its online sales have increased manifolds. Wal-Mart also has access to
some revolutionary technology built by Jet.com. More importantly, Wal-Mart has many private
label brands which they are able to manufacture at rock bottom rates given their extensive
supply chain in China. It would be easy for them to market these products in India as well. Since
these products will be priced lower than the competition, it will give Flipkart the edge. The
gross merchandise sold by Flipkart is expected to rise manifold after Wal-Mart acquires the
company.
Why did Walmart acquire Flipkart?
➢ Walmart wanted to enter and capture Indian market .

➢ As Indian ecommerce market has shown a rapid growth from recent years .
➢ As per Morgan Stanley, India’s online retail is set to grow by 1,200% to $200 billion (30%
CAGR) by 2026 from $15 billion in 2016. Average wages are rising by 2% annually and
internet penetration is also growing as data costs are becoming more competitive. This
makes Indian e-commerce space lucrative.
➢ Flipkart has the largest market share in e-commerce, so with this acquisition Walmart
can achieve next leg of growth in India with Flipkart’s 175 million registered user base
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REASONS FOR THE DEAL: WALMART AND FLIPKART
Market Strategy, Insecurity, ambition, growing Indian market etc. there are list of many
possible reasons for the deal, Walmart’s Amazon problem Walmart’s total revenue for the last
fiscal was over $500 billion, while Amazon’s net sales were $177.9 billion. Walmart showed net
income of over $20 billion, while Amazon’s net income was $3 billion. Yet, Amazon today is
among the top five companies in the world in terms of market capitalisation at over $680 billion
market cap. In fact, for a brief time this year the Seattle-based ecommerce giant was the
second most valuable company in the world, behind Apple. Analysts have also begun predicting
that Amazon could beat Apple to become the first company in the world with a $1 trillion
market capitalisation.
Walmart’s market cap on the other hand is at just over $250 billion, not small change at all, but
smaller than Amazon’s. The reason for the stock markets in the US putting greater value in
Amazon than Walmart is because the former is seen as the company with a more robust future
and growth potential. Ecommerce accounted for 13 percent of total retail sales in the US in
2017 and 49 percent of growth, and Amazon is responsible for most of the growth. Overall
ecommerce in the US grew at 16 percent last year.
According to ecommerce business intelligence firm Internet Retailer, Amazon accounted for
over 70 percent of the $62.47 billion growth in US online retail in 2017 and almost 35 percent
of the $127 billion rise in the overall retail market. Walmart has spent the last few years playing
catch-up in ecommerce. It spent $3.3 billion in late 2016 to acquire Jet.com, a direct competitor
of Amazon. Last fiscal, Walmart had ecommerce sales of $11.5 billion, a growth of 44 percent.
However, in the last quarter, ecommerce sales grew at only 23 percent, much slower than
Amazon. In the US, Walmart is the only formidable competitor left for Amazon. Walmart has
been growing its ecommerce operations a lot and Amazon has been increasing its footprint
with physical stores. It’s natural for that battle to spill into international turf as well.
Despite the potential for growth in online retail within US, Amazon has already made big strides
in international markets. This is because the expectation is that emerging markets of today will
become growth drivers of the future. China’s Alibaba, for instance, is valued at over $520
billion, and most US tech and ecommerce companies either missed the China bus or were
kicked out.
India is the only big ecommerce market still up for grabs. India’s online retail market grew at 23
percent in 2017. While India’s overall retail market is over $670 billion in size, online sales is just
at $20 billion. The headroom for growth is immense, with 60 percent growth expected this
year. Amazon is already in a strong position in India with a market share of around 35 percent,
compared to Flipkart Group’s 45 percent. If Amazon extends this lead in India or builds an
unassailable position, the company will be able to extend its overall lead over Walmart
dramatically.
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Walmart’s India problem The Bentonville, Arkansas-based retail giant has been in India for over
a decade, but hasn’t managed to grab any share of the retail market. This is primarily because
of the country’s FDI rules in multi-brand retail. In 2011, India allowed 51 percent FDI in multi
brand retail, but allows 100 percent FDI in the wholesale segment. Walmart had a partnership
with Bharti Enterprises, but that never scaled up and the partnership ended in 2013. Walmart
still operates 21 Best Price wholesale stores in India, but has no presence in retail. They are an
iconic brand, have the cash and the market cap, but have let others dominate the market,
especially in markets other than the US. Unless they do something drastic they will lose India
too. They should have done something like this (an investment into Flipkart) at least four years
ago, but it is better late than never. It is a desperate situation for them
Exit for Flipkart investors Flipkart has become the too-bigto- fail company for the Indian startup
ecosystem. It has raised over $6 billion from investors like Tiger Global, Accel Partners,
SoftBank, Tencent, eBay, and Microsoft. When SoftBank invested in Flipkart, Tiger got a $424
million exit while Accel got over $110 million. But investors will expect a blockbuster exit from
the company. “A strategic investor always has a different equation than a pure financial
investor. A strategic investor eventually wants control and a buyout. Tiger, SoftBank, and others
will look at IRR. Walmart will not look at just IRR. For financial investors this is the only decent
chance to sell their stakes and get returns. With Walmart as an investor, the risk is lower and
the value will go up. Flipkart will be in stronger position.
Going offline, there is a clear need for Flipkart to start having an offline presence. For Walmart
too, while a strong online presence in India would be a good start it will want to start building
up an offline retail play Indian etailers need to have an offline presence to some extent.
Amazon has already started building this—through partnerships under Project Udaan it has
stores in semi-urban markets, it has its own dark stores for its hyperlocal grocery delivery
platform Amazon Now, and it has a stake in Shoppers Stop. From Flipkart’s perspective, not
having an offline presence and not having sourcing linkages in fresh is a handicap. In mobile and
fashion etc. Walmart can't help Flipkart. Where Walmart will help is in daily household items. In
this, you will need offline formats to capture the market. I also believe it is not easy to crack
offline for online guys. The business model is very different and in offline you are competing
with Dmart, Future Group, and others. Here Walmart’s expertise will help
The big question is will this be enough for the two companies to fend off Amazon. If there is
one area where Walmart really pales in comparison with Amazon it is in new tech like Amazon’s
voice assistant, Alexa. Its smart grocery store experiment in the US is another example. Sure,
such technology is not yet adopted by all those online but this is where technology is headed. If
one company has shown that it can keep innovating it is Amazon—one of the reasons why it
has such high market capitalisation.
Amazon’s spend on R&D, at $23 billion last year, shows how important innovation is for the
company. Amazon spent the most on R&D last year, ahead of Google, Intel, Microsoft and
Apple. To put that in context, Amazon’s R&D spend last year was larger than India’s current
ecommerce market. This is what the Walmart-Flipkart combine is up against.
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What’s more important to Walmart than the current size of the market, though, is its
anticipated growth. From 2017 to 2021, online retail in India is expected to grow 141 percent to
more than $50 billion.
India's 2017 e-commerce market share is distributed among in between, Flipkart, Amazon,
Snapdeal and Other players. Some players are being acquired by these standing players in the
market. In 2018, entry of Walmart in e-com business of India by acquiring Flipkart creates
disturbance and the ripple of the wave will rearrange the scenario
Tax Complexities of the Walmart-Flipkart Deal
Among the stakeholders selling their stakes to Walmart are Tiger Global (16.99%), SoftBank
(22.3%), Naspers (13.76%), Ebay (6.55%), Accel Partners (2.88%), Sachin Bansal (5.96%), Binny
Bansal (1.63%), and others (6.93%).
As far as the law is concerned, except for Sachin Bansal and Binny Bansal’s stakes, the majority
of the shares sold to Walmart belong to non-resident shareholders. They are selling their shares
in a Singapore-based company — Flipkart Pte Ltd, which owns an Indian company — to a non-
resident (US) company, Walmart.
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As more than 50% of the value of Flipkart Singapore is derived from Flipkart India, Section
9(1)(i) of the Income Tax Act will be applicable to non-resident players selling their stakes in a
capital asset based in India to another non-resident player.
According to Section 9(1)(i) of the I-T Act, popularly known as the Vodafone tax, any income
accruing or arising, whether directly or indirectly, inter-alia, through the transfer of a capital
asset situated in India, shall be deemed to accrue or arise in India. Depending on the nature of
the investment, the withholding tax in cases of such indirect transfers might vary from 10-
20%.
However, in case of Sachin’s and Binny’s stake sale to Walmart, another section of the I-T Act
will be invoked. Since the duo has held their shares for more than two years, a long-term
capital gain tax of 20% will be applicable in the transfer of their shares to Walmart.
How Tax Treaties With US, Mauritius Will Affect Investors
In case of players like eBay and SoftBank US, which are US-based players, Article 13 of the Indo-
US treaty will get triggered. Similarly, Tiger Global, which had apparently invested in Flipkart
Singapore through its Mauritius fund, the Indo-Mauritius treaty will be applicable
In the case of SoftBank US’s share transfer to Walmart, the withholding tax, depending on the
time they were held, is likely to be 10%. In the case of Tiger Global’s share transfer to Walmart
through its Mauritius fund, the deal papers are still not in the public domain, so the picture is
not yet clear. As per the Indo-Mauritius treaty, there are chances that Tiger Global may not
have to pay the withholding tax at all
The tax treaty between India and Mauritius applicable in this case says: “Gains from the
alienation of shares acquired on or after 1st April 2017 in a company which is resident of a
Contracting State may be taxed in that State. However, the tax rate on the gains referred to in
paragraph 3A of this Article and arising during the period beginning on 1st April, 2017 and
ending on 31st March, 2019 shall not exceed 50% of the tax rate applicable on such gains in the
State of residence of the company whose shares are being alienated.”
Hence, it will depend on explainability of the deal how does it invoke the treaty. “As India has
signed treaties with almost all the countries involved in this deal, there is clarity pertaining to
the double tax issue
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Walmart May Sell Part of Flipkart Stake To Other Investors
According to the official statement shared by Flipkart, Walmart’s investment includes $2 Bn of
new equity funding, which will help Flipkart accelerate growth in the future. Walmart and
Flipkart are also in discussions with additional potential investors who may join the round,
which could result in Walmart’s investment stake shrinking after the transaction is complete.
Even so, the company will retain a clear majority ownership.
Meanwhile, the Alphabet-Flipkart deal will actually occur between Walmart and Alphabet, or
between two US companies involving a capital asset based in India.
The statement further stated that to finance the investment, Walmart intends to use a
combination of newly issued debt and cash on hand. Upon closing the deal, Flipkart’s financials
will be reported as part of Walmart’s international business segment. If the transaction were to
close at the end of the second quarter of this fiscal year, Walmart expects a negative impact to
its FY19 EPS (earnings per share) of approximately $0.25 to $0.30, which includes incremental
interest expense related to the investment.
Since Flipkart Singapore holds more than 51% of Flipkart India, “as per Section 79 of the
Income Tax Act, losses can’t be carried forward or set off while shareholders are changing
hands
Compared to the Vodafone-Hutch Essar deal which occurred over 10 years ago in 2007, today’s
laws and treaties are far clearer and conducive to international deals. With India having signed
treaties with various countries
Also the Indian government, which is promoting investment in India with its tagline ‘Invest
India’, won’t allow the Income Tax department to go aggressive, as was the case in the
Vodafone deal.
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Case study on Acquisition of Mindtree Ltd by L&T Infotech
Overview:
The motive of the case is to analyse the recent acquisition of Mindtree Ltd. by the corporate
conglomerate giant Larsen & Toubro (L&T). L&T Infotech (LTI), which looks after the
information technology (IT) business of the L&T group made a hostile bid for Mindtree Ltd., one
of India’s leading and fastest growing infotech companies in March 2019. The case goes on to
analyse the deal and delves into the reasons for the deal turning hostile. The objective of the
case study is to understand the concept of hostile takeovers and the business environment that
augur acquisitions
There have been certain very interesting and jocular exchanges of words between the
promoters of Mindtree and LTI1 during the whole phase of takeover, which put the focus on
the human element in acquisitions
LTI’s take on the acquisition was very clear. For them, it was a pure business deal. They were on
the path for fast growth, which Mindtree would help them achieve. Certain sectors such as
Retail, Consumer Packaged goods, Media and Technology are underachieved for LTI where
Mindtree has a formidable presence. Mindtree would help LTI explore geographies in Europe
that so far were unexplored
However, for the promoters of Mindtree, this bid for takeover became an emotional issue. It all
started when one of the non-executive directors of Mindtree itself—V. G. Siddharth—came up
to LTI and offered his shareholding of 21 per cent in Mindtree. LTI grabbed this offer and went
on to announce that it would acquire a total of about 60 per cent in the company, which made
the other promoters very uncomfortable. There was a lot of resistance from some of the
Mindtree promoters, and certain hasty announcements and statements in the media were also
made. This interesting interlude between the two companies brought a lot of attention to the
acquisition and left the investors in a state of confusion.
The main objective of the case will be to analyse and teach the different corporate actions
which took place and the strategic decisions that were taken during the entire interaction
between the two companies
In a first successful hostile takeover in the Indian IT services space, Mindtree has now become a
subsidiary of construction major Larsen & Toubro (L&T). L&T's open offer to buy up to
5,13,25,371 equity shares in Mindtree - representing 31 per cent of the voting equity share
capital - closed last week with an over-subscription by 116 per cent. Even as promoters chose to
stay away from tendering their own shares, with a once reluctant Nalanda Capital tendering its
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entire 10.6 per cent holding in the company, L&T now sits comfortably at over 60.06 per cent
holding in the company
Why is this a Hostile takeover?

A hostile takeover is said to be one where a company acquires the target company by going to
the target company’s shareholders or by fighting to replace management to get the acquisition
approved. And when the management of the target company doesn't want the deal to take
place, it is called a hostile takeover.
In Mindtree's case, promoters SubrotoBagchi, NS Parthasarathy, RostowRavanan, and
Krishnakumar Natarajan have unconditionally opposed the takeover bid by L&T.
About Mindtree
Siddharth3 approached L&T in March 2019 and offered his shareholding in Mindtree. L&T took
to the offer and bought out his stake on 18 March 2019. In the same month, L&T declared an
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open offer to the shareholders to buy a stake of another 26 per cent in Mindtree and then
further increasing it to 51 per cent. In that event, the present management of Mindtree would
lose control of the company
The current management/promoters of Mindtree were extremely resistant to the deal.
Mindtree was incorporated by ten IT professionals from different companies such as Wipro,
Cambridge Technology Partners and Lucent Technologies who all had a common passion for
technology and entrepreneurship. The brainchild of Krishnakumar Natarajan (KK) and
Subroto Baghchi was initially set up as a tech company with Ecommerce in its centre. Later
on, as the company started taking shape, other like-minded people, namely N. S.
Parthasarthy, Kalyan Banerjee, Scott Staples, Kamran and Rostow Ravanan joined the
bandwagon. Natarajan had been associated with Wipro from 1982 to 1999 in various
positions wherein he started and grew the Ecommerce division.
When Mindtree was set up in August 1999, he played a key role in building the organization
and setting up the US business. He, later on, drove the company’s expansion into Europe,
Asia Pacific and the Middle East. This international diversification made a big difference in
building a risk-resilient company and a diverse client profile. KK4 was the executive chairman
of Mindtree when Larsen & Toubro Infotech (LTI) made the hostile bid. Baghchi had
previously worked for Wipro and Lucent. Baghchi who later took on the role of a non-
executive director in the company had played a key leadership role as the Chief Operating
Officer during the tough years between 1999 and 2007, spanning the economic slowdown in
the USA and into the crisis after 9/11.
At a time when most of the new IT companies had to shut shop, Baghchi moved to the USA,
in order to deal with the crisis, which helped the leadership team stay together during the
difficult phase. Baghchi was instrumental in articulating Mindtree’s Vision, Mission and
Values and led areas such as leadership development, marketing and knowledge
management initiatives, which differentiated the company from other technology
companies in the field.
In a desperate but bold attempt to stop the acquisition, on 20 March 2019, the Mindtree
board announced a share repurchase after L&T’s open market bid to buy shares.
30 | P a g e
However, even if it were not successful in stalling the takeover, it would definitely raise the
offer price for the acquirer.
The acquisition of Mindtree would help LTI to significantly expand its presence, with
operations in key markets across the world. Mindtree had a strong presence in the
technology and media industries, which were all potentially new areas of expansion for LTI.
Mindtree catered to numerous industries and provided customized IT solutions for
industries such as Banking, Insurance, Retail, Consumer Technologies, Education,
Manufacturing, Transportation and Logistics, Media and Entertainment, Travel and
Hospitality and many more. The services of Mindtree could be categorized into six parts,
namely Digital Services, Operations, IT Consulting Services, Engineering R&D, Enterprise
Software and Products. In the year 1999, when ten IT professionals came together to form
this company, part of the company was held through a company in Mauritius. It was initially
funded by Venture Capital as most IT firms are. In 2007, Mindtree came out with an Initial
Public Offering (IPO) and was publicly listed on the Bombay Stock Exchange BSE and National
Stock Exchange (NSE). Its IPO was oversubscribed by 100 times. The company spread out in
17 countries had more than 40 offices. At the time of the announcement of the bid, the
company had more than 20,000 employees of which 31 per cent were women. The
employees represented 65 nationalities and 93 per cent of the workforce comprised
software professionals. Mindtree had the reputation of a fast-growing company in the
industry. Its revenues increased by 28.53 per cent, and profit before tax increased by 32.93
per cent in 2019 from the previous year. In the year 2018–2019, Mindtree posted an annual
revenue of US$1 billion
Larson &Toubro Infotech
In 1997, LTI resumed operations as a subsidiary of L&T. Since then, its journey had been
eventful and fast with a slew of acquisitions for augmenting its growth story. When it
announced the bid for Mindtree, it had a presence in more than 30 countries and had about
28,000 employees. It functions across several service verticals namely Cloud services,
consulting, Cloud-based Infrastructure services, Assurance, Cyber Defense Resiliency
Services and Applications Management. Digital has emerged as the universal change agent,
31 | P a g e
trying to address new challenges in the business world. LTI’s business philosophy was to
improve business outcomes with the use of Artificial Intelligence (AI), Automation and Data
Analytics. Their Digital services portfolio was one of the most advanced in the industry with
major focus on Internet of Things, AI, Digital Integration and Intelligent Robotics Programme
Automation.
Industry
The IT industry in India had revenues of US$181 billion as of March 2019 and was expected
to grow at 7–9 per cent in the next few years. Exports formed more than 80 per cent of
revenues and aggregated at around US$137 billion. The industry is expected to reach a
forecasted US$350 billion by the year 2025. The domestic industry, which generated
revenues of US$28–29 billion, was expected to grow at the rate of 10–12 per cent in the
coming few years. Among all the segments of the IT sector, the Digital technologies sector
was growing at 30 per cent per annum. The share of the Digital technologies segment is
expected to become a staggering 38 per cent by the year 2025. Foreign direct investments
to the tune of US$37 billion has come to the Indian IT sector between the years 2000 and
2019 as per the data released by the Department for Promotion of Industry and
International Trade (DPIIT).
Some of the major initiatives taken by the government to promote IT and information
technology–enabled services (ITeS) sector in India after the year 2014:
The government identified IT as one of the 12 champion service sectors for which an action
plan would be developed. Also, the government set up a ₹50 billion (US$745.82 million)
fund for realizing the potential of these champion service sectors.
As a part of Union Budget 2018–2019, National Institute for Transforming India (NITI) Aayog
would set up a national-level programme that will enable efforts in AI and would help in
leveraging AI technology for development works in the country.
In the Interim Budget 2019–2020, the Government of India announced plans to launch a
national programme on artificial intelligence (AI) and setting up of a National AI portal.
32 | P a g e
National Policy on Software Products–2019 was passed by the Union Cabinet to develop
India as a software product nation.
Looking to the industry scenario, and the environment for doing business, it was natural for
any ambitious IT company like LTI to expand through acquisitions.
Reasons for the Acquisition
In the past couple of years, LTI had been on a fast growth spree. In the years 2016 and 2017,
the company made some very focused and pure play acquisitions taking on the inorganic
growth path. In 2016, LTI acquired AugmentIQ Data Sciences that specialized in Big Data. In
2017, it acquired Syncordis SA for core banking implementation. In January 2019, LTI
acquired a US-based company called Ruletronics for making a big entry in the Pega
Implementation space. Mindtree’s portfolio has strong capabilities and clientele that is
complementary to LTI. Mindtree’s strong presence in the Media and Technology industries
was the main attraction for L&T where it had yet to make a mark. Mindtree’s presence in
industries such as consumer packaged goods, retail, travel and hospitality could pave the
way for a synergistic equation with the LTI portfolio.
LTI had a good presence in the USA but not in Europe. Acquisition of Mindtree would give
them an entry into the European markets.
Both companies were basically headquartered in India, and hence integration with respect
to ironing out cultural differences would also be less challenging.
How the acquisition was executed:
• 31 per cent was acquired in an open offer worth ₹50 billion.

• 15 per cent was acquired through an open market purchase.
• 20.32 per cent stake of V. G. Siddharth worth about ₹32 billion was acquired.
33 | P a g e
The total value of the deal was pegged at around ₹100.7 billion at ₹980 per share. This deal
has been tagged as the first hostile takeover in the Indian IT space. LTI declared that it
intended to have a total stake of 66.32 per cent in the company and, on 6 June 2019,
increased its stake to 28.90 per cent.
On 12 June 2019, amidst all the drama and hostility between both the companies, a report
of the independent directors of Mindtree came out. This report claimed that the offer of
₹980 per share made by LTI was a fair offer. This again was a thumbs up sign for LTI that had
maintained that its offer was anything but hostile and Mr A. M. Naik, Group Chairman of
L&T, even said that the directors of Mindtree were in fact perpetrating hostility and not the
other way around.
Initially, LTI had offered a price of ₹1,150 per share with a caveat that the management
cooperated in the acquisition. But since the management did not take kindly to the deal, LTI
had had to take the market route (Table A3 and A4).
Share price movement of Mindtree Ltd. and LTI Ltd. between the date of purchase of V. G.
Siddhartha’s shares, announcement of acquisition and the date of final acquisition.
How did L&T take over Mindtree?
In a normal scenario, when a company tries to acquire another, it can offer to gain control if it
owns 25 per cent stake of the company it is trying to acquire. However, L&T did not own 25 per
cent ownership of the company. So, L&T used a loophole in the Securities and Exchange Board
of India's (SEBI’s) Takeover Code.
The Indian conglomerate used Section 3, Clause 1 along with Section 4 of the securities
regulator’s takeover code, which entitles L&T to make an open offer to acquire public
shareholding in the company.
As per this section, those with a 25 per cent stake or more cannot take over a company unless
an open offer has been made to acquire shares of a company with a public announcement.
However, the takeover code also says whether or not one holds shares or voting rights in the
company, one is not eligible to take control unless a public announcement of an offer to
acquire those shares is made. This allows L&T to make an open offer, without owning 25 per
cent shares in the IT major.
34 | P a g e
How the takeover has panned out till now?
The deal started when L&T bought 20.32 per cent shares in Mindtree from Cafe Coffee Day
founder VG Siddhartha for almost Rs 3,269 crores in March 2019. Following this, it made an on-
market purchase of around 15 per cent capital shares.
L&T made an open offer for an additional 31 per cent stakes which started on June 17 and
concluded on June 28, 2019. On July 2, 2019, Mindtree said in its regulatory filing, "We wish to
inform that Larsen & Toubro Limited has acquired equity shares to an extent 60.06 per cent of
the total shareholding of the company and has acquired control and is categorized as promoter
pursuant to Sebi... Regulations, 2018.
How Mindtree acquisition will benefit L&T?So, why was L&T keen on
taking over a mid-size IT firm?
The group’s core business—large infrastructure projects such as airports, bridges and power
plants—generates profit after tax (PAT) of around 7 per cent, according to Subrahmanyan. It
wants to derive higher profits from the services business, which is also less risky. “Over the last
few years, we have been giving more fillip and push to services business. These businesses are
more profitable and we are able to see PAT of 15-16 per cent. From an overall portfolio point of
view, it makes sense to grow the business faster
And, Mindtree was a perfect fit. It was one of the earlier companies to sense and seize the
opportunities in new digital technologies like artificial intelligence, automation and machine
learning. In the January-March 2019 quarter, digital technologies accounted for 49 per cent of
the company’s revenue. In the case of Tata Consultancy Services, India’s largest IT Company,
digital contributed just 32.2 per cent of the revenues in the same quarter.
L&T itself has been a big user of new technology tools in engineering, construction and other
businesses. Riding on these strengths, the company has launched a new technology platform
called L&T-Nxt, which targets building a business through the use of new-age technologies. “We
believe there is a huge opportunity ahead with an increasing number of companies moving
towards Industry 4.0 (fourth industrial revolution) and adopting smart products, systems and
processes to unlock incremental value,” said L&T chairman A.M. Naik. “While it is too early to
talk about financials, L&T-Nxt is well positioned to capture a significant market share and
become one of the key drivers for L&T’s growth in the long term
35 | P a g e
There are other synergies across services verticals. For instance, L&T Infotech has a strong
presence in banking, financial services and insurance verticals, which contributed 47 per cent of
its revenue and is followed by manufacturing (15.9 per cent). On the other hand, at Mindtree, it
is hi-tech and media (39.6 per cent), and retail and consumer packaged goods that were the
strong contributors. “They operate in vastly different areas, with a minimum client overlap,”
said Subrahmanyan
Analysts say the acquisition will help L&T add several large clients to its IT services portfolio.
“Over the next 1-2 years, the acquisition of Mindtree would add significant scale, plug the gaps
in LTI’s portfolio and add new large clients (Hermes, The Carlyle Group and Microsoft) and
enhance the digital capabilities and presence in infrastructure management space and cloud
within the L&T group,” said a report by broking firm Sharekhan.
For now, though, L&T plans to run Mindtree as a separate entity, said Subrahmanyan. Analysts
wonder if it would remain so in the long term. “Mindtree and LTI businesses are highly
complementary,” said KawaljeetSaluja, analyst at Kotak Institutional Equities. “Mindtree has a
broad range of offerings, is strong in digital, particularly in the experience layer and cloud
services, and excels in handling the discretionary spending of clients. LTI’s strengths are geared
towards core transformation, enterprise solutions and strength in multiple aspects of digital
including cloud, analytics, internet of things, cognitive and mobility.”
Finding new leaders and a plan of action to retain existing managers at Mindtree will be a
critical focus area for the L&T management. There is speculation that attrition at Mindtree will
spike after the promoters’ exit. Addressing this, along with integrating Mindtree’s existing
workforce and convincing key clients to stay will be crucial for L&T.
36 | P a g e
Defense strategies used by Mindtree to defend against hostile takeover:
Buyback of shares:
It has probably happened for the first time in India that a company wanted to buy back its
shares to avoid its takeover by another company. News of buyback when such a takeover is
being considered goes on to show the disharmony between management and stakeholders.
When a buy back is announced by Target Company, the cost of acquiring goes up for the
acquirer.
The maximum amount of buyback of shares as per the Companies Act is 10% of company’s
capital and free reserves without special resolution. This maximum limit can be 25% when a
special resolution is passed in the General Meeting. Apart from this, the Debt to Equity ratio
after buy back cannot be more than 2:1. The price at which the buyback can be done is the
average of six months.
VG Siddhartha could have offered his shares for buyback to get funds from it provided 15% of
the offer of buyback be reserved for retail shareholders and two-thirds of shareholders pass the
buyback. However he decided to sell off his stake to L&T instead of going for buy back.
Some industry experts criticized the governance of Mindtree stating that before announcing
buy back it did not take its strategic investor Mr. VG Siddhartha into confidence who has been
with the company since the beginning.
White knight:
A white knight is an individual or company that acquires a company on the verge of being taken
over by the black knight (unfriendly acquirer). Management of the company changes in case of
a hostile takeover. But when a white knight takes over, there is no change in management of
Target Company. Thus, a white knight saves a company from hostile takeover.
Mindtree promoters tried to seek a white knight by asking PE firms like Baring PE Asia, Chrys
Capital, KKR etc. to purchase its stake from VG Siddhartha who eventually sold its 20.32% stake
to L&T. However, none of the PE firms agreed to play the white knight as they too wanted a
controlling stake in the company just like L&T.
37 | P a g e
Conclusion
Despite continuing economic uncertainty and underlying concerns about a recession in many
developed markets, M&A is still high on the agenda of large companies. The focus on the tax
aspects in M&As is intensifying as tax becomes even more important to deal processes and
valuations than it was before. A company planning a merger or a takeover, need to do intensive
tax planning before finalizing the deal to get the maximum tax concession and benefits in the
deal. In India, law provides for ample benefits in the form of various provisions to companies
going in for amalgamation. A very good incentive is provided for revival of sick units in the form
of section 72A. With the introduction of section 72A in 1978, many mergers-look place to avail
the tax benefits. But in today’s scenario, we can assert that the tax consequences are the off-
shoot of the merger and not vice versa
Tax laws in many countries tend to be complex, but with India beginning to occupy an
increasingly important place on the world stage, the benchmark for comparison has to be
changed. The Indian tax laws need to be made less complex, transparent and more certain.
Certainty and stability form the basic foundation of any fiscal system. But this principle was
totally disregarded by the retrospective tax amendments introduced by the Finance Act, 2012
with retrospective effect from 1 April 1962. The uncertainty created by these amendments and
deviation from international practices prevailing had a negative impact on the investors
sentiment and the Indian economy saw a rapid decline in FDI to India (almost 65 percent in
April-June 2012). That’s why, Government constituted Shome Committee to provide for
recommendations on taxation of indirect transfers. The recommendations (mentioned earlier)
truly align with norms of certainty, predictability and stability of tax laws. But the Government
did not follow the recommendations and the provisions regarding retrospective amendments
of indirect transfer were retained. So the researcher, has given certain suggestions regarding
this in the last chapter to make the law more certain, clear and predictable. If after five years of
the deal, the laws can be suddenly amended with retrospective effect to bring the deal within
the taxation net (as in Vodafone case), it is certainly going to shake investors confidence. In
addition to various benefits available to companies on amalgamations, tax implication of share
acquisition and business acquisition are different and should be taken care of by the
prospective buyer or the seller. In a country, where there is steep increase in financial
transactions with large number of mergers and acquisitions happening, there is a need to post
an efficient, reliable and transparent transfer pricing regime having regard to the implications it
can have on the international trade.
Though, we can be proud of having a more reliable transfer pricing provisions compared to
other countries, the need to emerge as a stronghold of the international trade, India has to
reinvigorate its taxing procedures, No doubt, India has done so by introducing provision of
Advance Pricing Agreement and further clarifying safe harbour provisions in its Finance Act,
2012, to further bring its transfer pricing regime according to international norms and
standards and it should continue to do so. Now, the most controversial of all-GAAR. After the
positive policy recommendation on GAAR by the Shome Committee, it will have to be seen how
38 | P a g e
many recommendations of the committee are incorporated in the rules which are to be made
by the government. Given the inherent subjectivity involved in GAAR application, it does carry
the risk of arbitrariness in tax administration. Therefore, GAAR need to be implemented
judiciously and sensibly with adequate safeguards. Let’s not forget to say few words on the
uncertainty created in the Indian tax environment by the rulings of various judicial forums. But
the recent trend seems to be that the Indian tax authorities will pierce the corporate veil to
look into the real nature of a transaction to determine the capital gains chargeable to tax in
India. Although the decision in Idea Cellular Case, is fact specific is nonetheless likely to have
wide repercussions. The intention to bring overseas M&A within the Indian tax net is further
fortified by the retrospective tax amendments in the Income Tax Act.
Thus, given the potential tax implications of such deals, tax payers need to consider the risks
and potential pitfalls to avoid unintended consequences. Moreover, as regards implications of
stamp duty in mergers and amalgamations, the researcher can conclude that the applicability of
stamp duty on the court order approving the scheme of arrangement has been a keenly
disputed issue for a considerable period of time owing to lack of preciseness in the Indian
Stamp Act
Initially, companies used to take a position that the court orders are not ‘conveyance’ as
defined under the stamp duty law, therefore no stamp duty is payable on the same. In order to
overcome the above contention, some of the states amended their stamp duty provision and
included a specific entry for court orders passed under section 394 of the Companies Act. But
consequent to such amendments, companies started taking a position that stamp duty is
payable only in the states that have a specific entry for the court orders. Though, in the
judgement of Hindustan Lever Ltd. Supreme Court laid down that the court order is a
conveyance and therefore subject to stamp duty but the certain companies continued to take
the position that since this judgement was in the context of Bombay Stamp Act, it is not
applicable to the states that do not have any specific entry and even some states took the
position since transfer of property in a scheme happens by way of vesting, pursuant to a court
order, and therefore, cannot be regarded as an instrument. This view was particularly taken by
Division Bench of Calcutta High Court in Madhu Intra case.
Thus, multiplicity of High Court rulings pointing in different directions has created a lot of
confusion. Therefore, it is submitted that the Indian Stamp Act be suitably amended to avoid
such extensive litigations in future. To add to it the Indian Stamp Act is one such legislation
without an express inclusion for a scheme of arrangement which has resulted in a great amount
of uncertainty in cases that involve amalgamation of companies registered in states governed
by the Indian Stamp Act. But recently, the Delhi High Court had tried to remove the above
uncertainty by including court order under Section 394 in the definition of conveyance and
hence stampable irrespective of a specific entry in the States Stamp Act. Nonetheless, the ruling
of Delhi High Court assumes great importance in deciding stampability of mergers in states
which have not enacted their separate stamp legislation. Thus, its possible impact upon such
states cannot be over-emphasised
39 | P a g e
The lack of uniformity of acceptance of a single stand point throughout the country and
differential stamp duty regime in different states has created acute confusion on the issue. It is
high time that the Indian Stamp Act is amended to make this legal issue abundantly clear, so
that unnecessary litigation is avoided. Such a pragmatic policy should be made possible without
discrimination throughout the country. In addition to uniformity of stamp law, stamp duty rate
should also be lowered all over India. It should also be lowered down as lower rates of stamp
duties translate into increased revenues for the government in the long run. Lower and
rationalised stamp duty rates will promote M&A activity in India. It will encourage cross-border
mergers as foreign companies will like to invest in India. In rest of Asia, rates are on an average
2-3 percent whereas in India, they are around 8-10 percent. Even the planning commission in
its 10th Five Year Plan has stressed upon the legislature reforms for rationalisation and
reduction of stamp duty rates in various states in India to 3-5 percent.
In the views of the researcher, stamp duty rates should be reduced at around 3 percent so that
other Asian Countries do not have an edge in attracting foreign investment than India. The
above mentioned reforms in M&A activity should be carried out at the earliest to promote and
smoothen the process of M&As in India. To conclude, we can say that the tax laws face a huge
challenge in the present scenario. A balance have to be maintained between the interest of
both domestic and international investors and the revenue-authorities. India has to
reinvigorate its tax laws in such a way that M&A are not negatively affected and tax avoidance
and evasion is also checked. So, the current scenario presents this daunting task to the Indian
legislators
40 | P a g e
Bibliography
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Mergers___Acqui
sitions_in_India.pdf
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Tax_Issues_in_M
_A.pdf
https://dhruvaadvisors.com/files/M&AinIndia_TaxPerspective.pdf
https://shodhganga.inflibnet.ac.in/bitstream/10603/103368/13/13_chapter-v.pdf
https://www.mondaq.com/india/withholding-tax/819540/tax-issues-in-ma-transactions
https://www.pwc.in/assets/pdfs/trs/mergers-and-acquisitions-tax/mergers-and-acquisitions-the-
evolving-indian-landscape.pdf
https://blog.investyadnya.in/mindtree-hostile-takeover-attempt-by-lt/
https://economictimes.indiatimes.com/tech/ites/lt-infotech-seeks-to-log-on-to-
mindtree/articleshow/67617735.cms
https://journals.sagepub.com/doi/full/10.1177/2516604220920753
41 | P a g e

Topic 7 - Provisions Regarding Mergers and Amalgamation Under Income Tax Act - Corporate Tax Planning

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“Provisions regarding Mergers &

Amalgamation under Income Tax

Jyotsna Deolekar Roll No.3

Course: MFM (2017-20) Semester VI

-Merger and amalgamation of companies

-What Is an Acquisition Strategy

A business can be grown by an entrepreneur either by inner development or outside

Mergers and Amalgamations

Conglomerate Mergers A conglomerate merger is a merger between two entities in unrelated

Procedure under the Merger Provisions

Merger and amalgamation of companies.

Merger or amalgamation of certain companies.

Merger or amalgamation of company with foreign company.

Liability of officers in respect of offences committed prior to merger, amalgamation, etc.

Amortisation of expenditure in case of amalgamation or demerger. - Section - 35DD, Income-

Conditions prohibiting reconstruction or amalgamation of company.

AMALGAMATION, MERGER OR DIVISION

Market Share of Flipkart and its Main Competitors

About the Deal

Deal is beneficial to both the parties

Why did Walmart acquire Flipkart?

➢ Walmart wanted to enter and capture Indian market .

Tax Complexities of the Walmart-Flipkart Deal

How Tax Treaties With US, Mauritius Will Affect Investors

Why is this a Hostile takeover?

The current management/promoters of Mindtree were extremely resistant to the deal.

Larson &Toubro Infotech

Reasons for the Acquisition

How the acquisition was executed:

• 31 per cent was acquired in an open offer worth ₹50 billion.

How did L&T take over Mindtree?

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