Mergers And Acquisitions In India – A Brief Overview

1. Introduction

Mergers and Acquisitions ("M&A") are among the most effective ways to expedite the implementation of a business plan to grow rapidly. Companies in all sectors such as telecommunication, pharmaceutical, automobile, food and beverages and others have grown at lightning speed, due to their M&A strategy, apart from other factors. M&A refers to transactions between two companies combining in some form. Although the terms 'merger' and 'acquisition' are used interchangeably and in same breath, they connote different legal meanings.

An acquisition is when a larger company acquires a smaller company, thereby absorbing the business of the smaller company. On the other hand, a merger describes two firms, of approximately the same size, that join forces to move forward as a single new entity, rather than remain separately owned and operated.