Indian Approach To Hostile Takeovers

Abstract

The L&T-Mindtree (Larsen & Toubro Infotech Limited) hostile takeover battle in 2019 re-energized the discourse on India’s market for corporate control, which had recently seen only a few hostile takeovers. A takeover effort stimulates standards of the SEBI (Substantial Acquisition of Shares and Takeovers Regulation, 2011)[1] in addition to the Competition Act of 2002 which governs combinations. Although the Regulations of Combination take into account the peculiarities of a potential hostile takeover, they are insufficient to create a suitable competition law framework for them.

Within the Indian legal system, safeguarding the interests of minority shareholders during hostile takeovers is a crucial and complicated subject. Assaultive actions by acquiring parties to seize control over a target company, frequently against the will of its management and majority shareholders, present special obstacles. Minority shareholders, who often have a smaller interest and less sway in such situations, are more vulnerable to possible abuses and unfavorable outcomes that could materially harm their investments and rights.