The recent trending piece of news and the apple of the eye of all news agencies and share markets investors, L&T and Mindtree debacle, a first in an Indian IT industry. L&T CEO says that “they are doing this with Pyaar and will continue to look at this from their Dil”. This seems to look like another #MeToo Movement in the Corporate industry in India quotes “Executive Chairman of Mindtree”.
Hostile Takeovers apparently have happened only four times in India post-independence. There are government policies and regulatory obstruction to curb concentration of economic power and Hostile Takeovers through introduction of Industrial Development and Regulation Act-1951, MRTP Act, FERA Act to make takeovers in India almost impossible. Regulations specific to dealing with Takeovers in India and was first introduced in the 1994 and on subsequent amendments have taken to form “SEBI”. Acquisitions are directly monitored by SEBI in India where there is a substantial takeover or acquisition of Shares.
Acquisitions is progressive way of taking controlling stakes in a company or firm, it can be friendly or Hostile. Hostile takeover is a cold word to use, maybe since it is a method used for such acquisitions are not democratic and is an unpleasant way of taking over another company. Merger and Acquisition in India have been booming in Indian Industry quarters and therefore corporate industry restructuring has been quite upcoming.
Corporates usually adopt the following techniques to dodge takeovers:
- Poison Pill
- Scorched Earth Policy
- Flip over Pill
- Pac Man Defence
- Kamikaze Défense
| Year | Target Company | Acquirer |
| 1980 | Escorts Limited and DCM (Delhi Cloth Mills) | Swaraj Paul |
| 1998 | Raasi Cements-Sri Vishnu Cement Ltd | India Cements |
| 2000 | Dalmia Group | Gesco Corporation |
| 2008 | Zandu Balm | Emami |
Let’s wait patiently as the take drama unfolds in the L&T – Mindtree Takover. This is going to be a whole new ball game in the new age takeovers, we might even witness a new tactic for all we know.
Reference:
a) https://scroll.in/article/917418/how-l-ts-bid-for-a-hostile-takeover-of-mindtree-became-all-about-theatrics-and-emotions b) https://www.lawteacher.net/free-law-essays/business-law/india-has-experienced-only-a-handful-of-hostile-takeover-attempts-business-law-essay.php c) http://www.businessdictionary.com/definition/hostile-takeover.html
Business Management 