Takeover Advisory Services

As per Regulation 2(1)(b) of the Takeover Code, SEBI specifies the term Takeover as an “acquisition” — “directly or indirectly, acquiring or agreeing to acquire shares or voting rights in, or control over, a target company.”

Key Elements of a Takeover

• An attempt to take over control of an already registered company.
• Purchasing shares from shareholders to gain controlling interest.

Types of Takeovers (as per Law)

• Friendly Takeover: Negotiations between promoters and investors in a cooperative manner (Section 395, Companies Act, 1956).
• Bail-out Takeover: Acquisition of a financially sick company by a well-off company (Sick Industrial Companies Act, 1985).
• Hostile Takeover: Pursued without the company’s consent through a public tender offer (SEBI Regulations, 1997).
• Corporate Raiders: Direct offers made to shareholders, bypassing the board of directors.

Types of Takeovers (Business Context)

• Horizontal Takeover: Between companies in the same industry to increase market share. Example: Lipton India & Brooke Bond, Bank of Madura & ICICI Bank.
• Vertical Takeover: Between companies at different stages of production. Example: Tata Motors acquiring 80% stake in Trilix Srl.
• Conglomerate Takeover: Between companies from different industries for diversification. Example: RIL taking over Reliance Petroleum.

Benefits of a Takeover

Conclusion

Takeovers play a crucial role in corporate growth, diversification, and competitiveness. Whether through horizontal, vertical, or conglomerate strategies, our advisory ensures that businesses maximize opportunities while minimizing risks during the takeover process.