Question

Q) Discuss the different levels of approvals required for a Merger & Acquisitions transaction?

Answer 1

Merger and acquisition are one of the most important things in the corporate world that happens very often with the hope of gaining synergy. There are broadly three levels of approvals that any merger and acquisition have to go through to be able to make sure that it completed.

· The first and foremost is the internal management of the company has to believe that by acquiring that company operation with the current operation the gain will be achieved in terms of its profitability or increase in market share or capturing new technology. The senior level management within the company has to approve for all this thing and the proposal is presented to the board of directors.

· After the initial internal approval, the shareholders have to approve the acquisition because if they do not agree or might raise the question on its feasibility or value addition then the acquisition might not be completed at all. The shareholder approval is required either through the meeting with the board of directors or in the annual general meeting of the company.

· The third most important is the regulatory approval. The regulators are concerned with the protecting the consumer interest and the company should not become large that there is complete monopoly and consumers are being exploited. Regulatory approval is very important without that the merger and acquisition of the company cannot be completed.