Be it Vodafone’s purchase of Hutchison Essar or Aditya Birla’s takeover of Novellis, NTT Tata Docomo or Reliance MTN, mergers in India and by Indian companies have increased and become more significant than ever before.
The significance of mergers has led to greater legal control over them. One of the most significant developments in this respect has been effect of Competition law on mergers.
Technically, Merger is the amalgamation of two or more business or companies for increasing ambit of provision of services and efficient functioning. Mergers are usually done to widen the scale and scope of the business and produce at lesser price.
On 1st June 2011, India entered into the club of countries having full operational competition law. After speculations, controversies, doubts, oppositions and persuasions, finally amalgamations, combinations and acquisitions were added to the Competition law. Even though the competition law was enacted in January 2003, it took almost 8 years for the government to include amalgamations in the completion law.
This was largely due to the fact that the merger law received immense opposition. Right from the speculation that the CCI would be sitting over merger clearances delaying business transactions to claims that CCI does not have the capacity and capability to review complex mergers, it being a new competition agency. However, the motive behind all these speculations was to restrain merger law to enter the competition law and hamper businesses. History shows, be it Canada or US or the EU, competition law enforcement has never been welcomes by big business enterprise as it has the potential to hamper profit and ability to form cartels. Nevertheless, in 2011, mergers were included in the comp...
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...st companies used the first form. The first form for merger filing was almost discretionary. It only required that the basic information of the transaction be filed and to ensure that it did not fall into any of the categories given in the schedule and the regulations. However, unlike speculations this system proved to be quite effective as competition assessment could be gauged from the fact that nearly all merger filings were voluntary including details of the transaction as well as the reason why it would not have an adverse effect on competition. The AAEC or adverse effect on competition is a substantive test for evaluation of mergers in India.
Now this scheme of discretion has proved to be effective because this has reduced opposition and accusations that introducing would burden the businesses or postpone enforcement of merger control on different grounds.
Proper explanation of the current situation, involving the type and extent of the current problems. And the merger will bring progress over the current situation.
Marshall, A. B., & Broas, J. M. (2009). Getting it right in reductions in force: How to minimize legal risks. Venulex Legal Summaries, 18-25. Retrieved from EBSCOhost
I am interest in the study of this topic because I am curious about the financial effects of such a merger.
A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate clinical and managerial interventions.
The purpose of this paper is to attempt to recompile information about the merger of two corporations; one of many taking places i...
A merger occurs when two or more organizations decide to join forces and become one organization. One or more organizations must dissolve for this to happen. Sometimes all involved organizations dissolve and take on a completely new name. Sometimes one organization survives, and keeps their name, while the dissolved organization(s) must fall into the surviving organization's business structure. In the for-profit sector, this latter situation would be considered an "acquisition". However, in non-profit organizations, there are no owners. Therefore, since the ownership of another organization cannot be acquired, legally it would be considered a merger (Strategic Restructuring).
There was an apprehension that if Department Of Justice opposed the deal then Comcast would have had to fight a lawsuit aimed at blocking the acquisition. This would have led to abandoning its proposed merger, almost similarly as AT&T surrendered its efforts to buy T-Mobile in 2011 when regulators signaled they would block that deal.
In addition to the pro-competitive economic effect some firms also experience what is known as a post-merger which is basically an incentive for a firm to raise downstream competitor costs by raising upstream market costs. Hence the increased price pressures the previously established downstream prices which cause conflict.
...nvincing reforms such as the peer review panels in order to limit the potential biases that are mentioned above. However, these reforms do not remove the flaws within the Commission entirely. Several scholars have criticized its ineffectiveness and confirm how the faults remain in the system. Wills argues that such peer review does not apply to every single case; it only applies to 101 TEFU “where appropriate”, certainty not in cartel cases. Secondly, the commissioners are not prevented from discussion of the matter with the investigators while the case is under adjudication. This criticism is worth to be analyzed in more detail, a final decision of the proceedings are made by the college of commissioners who would receive a proposal from the Competition Commissioner, who would have been briefed by DG Competition officials, such as Chief Competition Economist and
An antitrust violation is a violation of the “laws designed to protect trade and commerce from abusive practice such as price-fixing, restraints, price discrimination and monopolization” (“Antitrust Violations / Wex Legal Dictionary/ Encyclopedia /LII / Legal Information Institute”, (n.d)). In looking at a company that has been investigated for antitrust behavior, identification of any pecuniary or non-pecuniary cost, along with any specific antitrust act violation will be examined. The examination of these findings will provide an insight into whether monopolies and oligopolies impact society negatively. Finally, an example of how a monopolistic or oligopolistic company can benefit society will be revealed.
Companies merge and acquire other companies for a lot of strategic reasons with different degree of success. The success of a merger is measured by whether the value of the acquiring firm is enhanced by it. The impact of mergers and acquisitions on organization can be small and big in other cases.
Mergers and acquisitions immediately impact organizations with changes in ownership, in ideology, and eventually, in practice. There are multiple reasons, motives, economic forces and institutional factors that can, taken together or in isolation, influence corporate decisions to engage in mergers or acquisitions. The financial risks of merging with or acquiring an organization in another country and how those risks can be mitigated are important issues for corporations to conduct research on. This paper will examine the sensible and dubious reasons for mergers and acquisitions and the benefits and costs of the cash and stock transactions.
...ur; in such cases, competition authorities must act to fight unlawful practices that are detrimental for the economic welfare.
When entrepreneurs plan their business future they will consider how they can increase their business size or profit in a short period. Entrepreneurs may consider growing their business or company by using a merger or an acquisition. These methods can be a speed up tool and a short cut to enlarge their business. (Burns, 2011) Also they can reduce competition, make it easier for entrepreneurs to think about the market and product development and risk reduction. Furthermore, some lesser – known companies can improve their firm’s image and market power by using merger and acquisition with larger firms. However, there may be risks associated with merger and acquisition related to lack of finance and time. (Burns, 2011) This essay will discuss more deeply the advantages and disadvantages of using mergers and acquisitions, showing how it can affect firms and market with the case study.
Monopoly causes market failures because it allows companies to hike prices at free will at the expense of the consumer (Winston, 2007). To minimize the abuse of monopoly power, the government can intervene by blocking mergers. In this respect, the Competition Commission has to move with speed to block any merger from taking place in an