Mergers and Acquisitions (M&A) Advisory

M&A, or mergers and acquisitions, covers every way one business combines with or buys another: a merger of two companies, the purchase of shares or assets, the sale of a division, a demerger or a joint venture. IMAK Advisory, an ICAI-registered CA firm in Bengaluru, advises founders, family businesses, investors and companies across India on the financial, tax and regulatory side of M&A – structure, valuation, due diligence, approvals, accounting and post-deal integration – and works with advocates and merchant bankers where the deal needs them.

Most M&A value is lost in the details: a structure that creates avoidable tax, a price based on profits that will not continue, a missed approval, or a buyer who inherits liabilities nobody checked. This page explains the M&A full form and the main types of deals, how to choose between a share purchase, an asset purchase, a slump sale and a merger, the merger routes under the Companies Act including the expanded fast-track route, competition approval, tax and FEMA, the due diligence report format for acquisition, what the Reliance Disney merger shows about large deals, and why the Land Acquisition Act 2013 is a different subject altogether.

• Deal structuring: share purchase, asset purchase, slump sale, merger, demerger
• Valuation, share exchange ratios and fairness analysis
• Financial and tax due diligence for buyers and investors
• Schemes of merger and demerger, including fast-track mergers
• Tax, GST, stamp duty and FEMA planning for the transaction
• Accounting for business combinations and post-deal integration

The M&A full form is Mergers and Acquisitions. A merger (called an amalgamation in Indian company law) combines two or more companies into one, with the shareholders of the merging company receiving shares in the surviving company. An acquisition is the purchase of control of a business – by buying its shares, its assets or an undertaking – where the target may continue as a separate company or be absorbed.

In everyday use, M&A also includes demergers (splitting a business into separate companies), slump sales (selling an undertaking for a lump sum), joint ventures and strategic investments. What links them is a change in who owns or controls a business, and the need to get the price, the structure, the tax and the approvals right at the same time.

The same commercial deal can be done in several ways, and each has different tax, stamp duty, GST, approval and liability results. Choosing the structure early saves money and time.

For a buyer, a share purchase is simpler but brings all past liabilities, which makes due diligence and indemnities essential. An asset purchase leaves liabilities behind but needs each asset, contract and licence to be transferred. For sellers, the tax result often decides the choice. We model the after-tax outcome for both sides before the term sheet is signed.

Schemes Approved by the Tribunal

Mergers and demergers are normally carried out through a scheme of arrangement under sections 230 to 232 of the Companies Act, approved by the National Company Law Tribunal. The process includes board approval, valuation by a registered valuer, applications to the tribunal, meetings or dispensation of meetings of shareholders and creditors, notices to regulators such as the income-tax department and the Registrar, and the final order. The scheme takes effect when the order is filed with the Registrar of Companies.

The Fast-Track Merger Route

Section 233 allows certain mergers to be approved by the Regional Director instead of the tribunal, which is usually faster. From 8 September 2025, the route was widened to cover more classes, including mergers between unlisted companies each with borrowings of up to ₹200 crore and no default, mergers of holding companies with unlisted subsidiaries that are not wholly owned, mergers of fellow subsidiaries where the transferor is unlisted, and the merger of a foreign holding company into its wholly owned Indian subsidiary. Demergers of undertakings can also use the route when conditions are met. If objections arise, the Regional Director can refer the scheme to the tribunal.

For many small and mid-sized groups, the fast-track route now makes consolidation practical. The conditions, such as declarations of solvency and creditor approvals, still need careful preparation.

Cross-Border Mergers

Mergers between Indian and foreign companies need approval under section 234 of the Companies Act and must follow the FEMA cross-border merger regulations, which cover the treatment of assets, liabilities, borrowings and shares on either side. They are common in "reverse flips", where startups that set up a foreign holding company move their holding structure back to India.

Under the Competition Act, an acquisition, merger or amalgamation that crosses the prescribed thresholds for assets or turnover must be notified to the Competition Commission of India (CCI) and approved before completion. Since September 2024, a deal value threshold also applies: a transaction worth more than ₹2,000 crore needs approval if the target has substantial business operations in India, even if its assets and turnover are small. Small-target exemptions, green channel filings and exemptions for certain intra-group deals reduce the burden for many transactions. Most mid-market M&A deals do not need approval, but the test must be done and recorded before signing.

Tax often decides whether an M&A deal makes sense. The main points are:

• Mergers and demergers can be tax-neutral for the companies and shareholders if the income-tax conditions are met, such as all assets and liabilities moving and shareholders holding a specified share in value continuing as shareholders
• Share sales are taxed as capital gains for the seller, with different rates and holding periods for listed and unlisted shares
• Slump sales are taxed as capital gains on the undertaking as a whole, computed on its net worth
• Fair market value rules can tax buyers or sellers when unquoted shares change hands below fair value
• Carried-forward losses and unabsorbed depreciation may survive a merger only in specified cases and may lapse on a change in shareholding
• Payments to non-resident sellers need tax withheld and remittance certificates
• Indirect transfers of Indian assets through foreign companies can be taxable in India

We prepare the tax analysis for both the structure and the price, and coordinate with tax advisers abroad where a foreign party is involved.

GST and Stamp Duty

The transfer of a business as a going concern is generally exempt from GST, but selling individual assets usually attracts GST, and input tax credit must be transferred correctly through the GST portal. Stamp duty is a state levy and can be significant where property is involved; merger orders are treated as conveyances in many states. Both should be calculated before the structure is fixed.

When a non-resident buys or sells shares of an Indian company, the price must follow the FEMA pricing guidelines, the sector must permit foreign investment at that level, and the transfer must be reported through the authorised dealer bank within the prescribed time. Investment by an Indian company abroad follows the overseas investment rules. Downstream investment by foreign-owned Indian companies has its own conditions. An M&A deal that is fine under company law can still fail on FEMA.

Every M&A deal needs a value: the price for a share or asset purchase, or the share exchange ratio in a merger – how many shares of the surviving company the shareholders of the merging company receive. In schemes under the Companies Act, the valuation report must be from a registered valuer, and listed companies also need a fairness opinion from a merchant banker. For price negotiations, buyers usually rely on discounted cash flows, multiples of comparable deals and the findings of due diligence.

A due diligence report format for acquisition is built around the questions a buyer needs answered before signing: what earnings will continue, what debt and liabilities come with the company, and what must be fixed or protected in the agreement. A typical due diligence report format for acquisition contains:

1. Executive summary with red flags and their effect on price
2. Scope, period, sources and limitations
3. Business, ownership and group structure
4. Quality of earnings with each adjustment explained
5. Net debt and debt-like items
6. Normal working capital and the completion mechanism
7. Tax review: income tax, GST, TDS, transfer pricing, open matters
8. Compliance review: Companies Act, FEMA, labour, licences
9. Material contracts, change-of-control clauses and key customers
10. Related-party arrangements that change after the deal
11. Recommendations for price, conditions, warranties, indemnities and escrow

Legal and title findings from advocates are usually added as a separate section or report. Our full guide to the process is on the due diligence audit page.

1. Strategy: why buy, sell or merge, and what success looks like
2. Initial assessment of the target or buyer, and confidentiality agreement
3. Preliminary valuation and structure options with tax effects
4. Term sheet or letter of intent with price range, structure and exclusivity
5. Due diligence: financial, tax, legal, commercial
6. Final valuation and negotiation of price adjustments and protections
7. Definitive agreements: share purchase, business transfer or scheme
8. Approvals: board, shareholders, creditors, tribunal or Regional Director, competition, sector regulators
9. Closing: payment, transfer of shares or assets, filings and FEMA reporting
10. Post-deal integration: accounts, tax registrations, systems, people and controls

Smaller private M&A deals can move from term sheet to closing in a few months; schemes through the tribunal often take longer. A realistic timeline agreed at the start avoids pressure to cut corners on diligence.

The Reliance Disney merger is one of the most widely reported recent Indian media deals and a useful public example of how large transactions are put together. We were not involved in it; the facts below are from public reports.

In the Disney Jio merger, completed on 14 November 2024, the media and JioCinema businesses of Viacom18, a Reliance group company, were combined with Star India, Disney's Indian business, into a joint venture valued at about ₹70,352 crore on a post-money basis, excluding synergies. After completion, Viacom18 held about 46.82%, Reliance Industries about 16.34% and Disney about 36.84%, giving the Reliance group control. The Competition Commission of India approved the combination in August 2024, subject to voluntary modifications offered by the parties, and approvals were also obtained from competition authorities in other countries.

• Structure: a merger of businesses into one company combined with fresh investment, rather than a simple purchase
• Valuation: agreed on a post-money basis, with synergies excluded
• Competition approval: obtained with voluntary modifications, showing how parties can address concerns
• Control and governance: shareholding, board positions and leadership agreed as part of the deal
• Multiple jurisdictions: approvals outside India for a deal involving global parties

Most businesses will never do a deal of this size, but the same building blocks – structure, valuation, approvals, governance and integration – apply to a merger of two family companies in Bengaluru as much as to the Disney Jio merger.

The Land Acquisition Act 2013 – formally the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 – governs compulsory acquisition of land by the government for public purposes, with compensation, rehabilitation and resettlement for affected owners. It is not about one business acquiring another, but it does affect businesses whose factories, warehouses or land are acquired.

• Compensation under the Land Acquisition Act 2013 is covered by a specific exemption from income tax and stamp duty for awards and agreements made under that Act, as clarified by the tax department
• Interest on enhanced compensation is treated separately and is generally taxable, with a deduction for part of it
• Compensation for land acquired under other laws may be taxed differently
• In the accounts, the business must derecognise the land, record the compensation and disclose any dispute over the amount
• If operations must move, the business may need new registrations, licences and bank approvals

If your land is being acquired, the legal process and the amount of compensation are matters for advocates and the authorities. We help with the tax position, the accounting and the financial plan for relocating the business.

Studies and experience agree that many M&A deals do not deliver the value expected. The reasons are usually predictable:

• Paying for profits that were one-off or depended on the seller's personal relationships
• Underestimating the cash needed after closing for working capital, integration and retention of key people
• Missing liabilities: taxes, guarantees, disputes or non-compliance that come with the company
• Culture and management clashes between the two businesses
• Customer or supplier contracts that end on a change of control
• Integration plans written after closing, or owned by nobody

Good M&A advice does not remove these risks, but it makes them visible early, prices them, and builds protections into the agreement. That is the difference between a deal that is closed and a deal that works.

Sellers who prepare get better prices and faster deals. M&A readiness starts a year or more before a sale: clean, audited accounts that match tax returns; a clear group structure; contracts and licences in the company's name; properties used by the business properly documented; related-party arrangements on arm's length terms; and key people tied in. A vendor due diligence review before approaching buyers finds problems while there is still time to fix them, and gives the seller control of the story.

In many M&A deals, not all of the price is paid on closing. An earn-out ties part of the price to the business's performance after the deal, which bridges a gap between what the seller believes the business is worth and what the buyer will pay today. Deferred consideration is a fixed amount paid later. An escrow holds part of the price with a third party to cover warranty or indemnity claims. Each needs clear definitions – what profit means, which accounting policies apply, who controls the business during the earn-out period – and each has tax and accounting consequences for both sides, including when the seller is taxed and how the buyer records the liability.

Buyers fund M&A transactions with their own cash, bank borrowings, investor money, or by issuing shares to the sellers. Indian banks finance acquisitions subject to their own policies and regulatory limits, and lenders will want the same due diligence, projections and security analysis as for any large loan. Issuing shares as consideration needs valuation, shareholder approval and, for non-resident sellers, FEMA compliance. The financing plan should be tested against the business's cash flows after the deal, including integration costs.

Apart from regulators, every M&A transaction needs the right internal approvals. Selling or leasing the whole or substantially the whole of an undertaking needs a special resolution of shareholders under section 180 of the Companies Act. Issuing shares as consideration needs board and shareholder approval and a valuation. Transactions with directors, promoters or group companies may be related-party transactions needing approval and disclosure. Lenders' consent is usually required under loan agreements before a change of control or transfer of assets. Missing an internal approval is a common reason M&A closings slip, so we prepare an approvals checklist at the term-sheet stage.

A demerger moves an undertaking from one company into another, with the shareholders of the first company receiving shares in the second. It is widely used in M&A planning to separate businesses before a sale, to bring in an investor for one business only, or to divide a family group between branches. A demerger can be tax-neutral if the conditions are met, including that the undertaking moves as a going concern with its assets and liabilities, and shareholders receive shares in proportion. Demergers can now use the fast-track route in eligible cases, which reduces the time compared with the tribunal.

After a deal, the accounts must reflect it correctly. Companies following Ind AS apply Ind AS 103: the acquirer measures the identifiable assets and liabilities of the acquired business at fair value on the acquisition date, and the difference from the price is goodwill or, rarely, a bargain purchase gain. This purchase price allocation often identifies intangible assets such as brands, customer relationships and technology. Mergers between companies under common control follow a different method, using book values. Companies following the other accounting standards apply AS 14 for amalgamations. The accounting effect on profits, through amortisation of intangibles, should be understood before the price is agreed.

• Bank mandates, signatories and approval limits changed on day one
• Accounting policies, chart of accounts and reporting calendar aligned
• GST registrations, input tax credit transfer and invoicing updated
• Payroll, provident fund, insurance and employee contracts moved
• Customer and supplier contracts assigned or novated
• Licences, trademarks and registrations transferred
• Indemnity claims, escrow releases and earn-outs tracked
• Compliance gaps found in due diligence fixed

Integration is where many M&A deals lose value. A short, owned plan for the first hundred days, based on the due diligence findings, keeps the business stable while ownership changes.

Many M&A transactions in India are between family businesses or small companies: a founder selling to a strategic buyer, two group companies merging, a business split between brothers, or a promoter bringing in a private equity investor. These M&A deals involve the same rules as large ones, but the issues are often personal as much as financial – succession, family agreements, properties held in personal names, and promoters' guarantees on company loans. Earn-outs, where part of the price depends on future performance, are common and need clear definitions and accounting.

1. Understand your objectives, the parties and the timeline
2. Prepare structure options with tax, stamp duty and approval implications
3. Support valuation, and coordinate the registered valuer's report where needed
4. Carry out or coordinate financial and tax due diligence
5. Work with your advocates on agreements and the scheme
6. Prepare filings, approvals and FEMA reporting on the financial side
7. Plan accounting and integration
8. Track post-closing obligations

We are not investment bankers or brokers. If you need someone to find buyers or investors, we can work alongside the merchant banker or adviser you appoint.

We do not publish fees. The cost depends on the size and complexity of the deal, the number of entities, whether a scheme is involved, the scope of due diligence, cross-border elements and the timeline. Stamp duty, filing fees and tribunal fees are paid at actuals. Our team shares the exact total after reviewing your requirements.

Two Group Companies Consolidating

A family group had three companies doing related work. Using the expanded fast-track route, the subsidiaries were merged into the holding company after creditor and shareholder approvals, with the merger designed to be tax-neutral and the stamp duty calculated in advance.

A Founder Selling to a Strategic Buyer

A software founder received an offer from a larger company. Comparing a share sale with a slump sale of the business showed a better after-tax outcome for the share sale. Vendor due diligence before the buyer's review fixed compliance gaps, and an earn-out was defined clearly in the agreement.

A Foreign Investor Acquiring a Stake

A foreign company acquired a majority stake in an Indian manufacturer. The price was tested against the FEMA pricing guidelines, the transfer was reported through the bank, and tax was withheld on payments to non-resident sellers with the required certificates.

• Agreeing the price before choosing the structure
• Skipping due diligence because the parties know each other
• Ignoring stamp duty on property in a merger
• Forgetting change-of-control clauses in loans, leases and customer contracts
• Not checking competition approval thresholds, including deal value
• Losing carried-forward tax losses through the wrong structure
• Leaving integration planning until after closing

Startups and Reverse Flips

Startups moving their holding company from abroad to India use cross-border mergers or share swaps, which need FEMA, tax and company law planning together.

Distressed Acquisitions

Businesses bought through insolvency processes follow the Insolvency and Bankruptcy Code, with its own procedures for resolution plans and liability protections.

Listed Companies

Deals involving listed companies trigger SEBI takeover and disclosure rules, and need merchant bankers and stock exchange approvals.

• We are not investment bankers or brokers and do not take commission for finding buyers or sellers
• We do not give legal opinions or represent clients before the tribunal; advocates do
• We do not issue fairness opinions reserved for merchant bankers
• We do not structure deals whose main purpose is avoiding tax
• We were not involved in the Reliance Disney merger or other public deals mentioned on this page

For a simple transfer of a small shareholding between existing shareholders at an agreed fair price, a fair market value computation and the transfer documents may be enough. For larger deals, mergers, demergers or anything involving non-residents, the structure and approvals need advice. If you are only exploring whether an M&A transaction makes sense, a short initial discussion of objectives, likely structures and tax effects is often enough to decide whether to proceed and which advisers you will need.

1. What do you want to achieve – growth, exit, consolidation, succession?
2. Are you buying or selling shares, assets or an undertaking?
3. Are any parties non-resident?
4. Do the companies have tax losses or major property?
5. Will competition or sector approvals be needed?
6. Which contracts and licences have change-of-control clauses?
7. Who will run the business after closing?

M&A discussions are highly sensitive for employees, customers and lenders. As chartered accountants we follow ICAI's confidentiality rules, work under non-disclosure agreements and share information only with the advisers you approve.

• Objectives and success measures agreed
• Structure chosen with tax, stamp duty and approval effects
• Valuation and exchange ratio supported
• Due diligence completed and findings priced
• Competition, FEMA and sector approvals checked
• Agreements reflect protections
• Filings and reporting completed
• Integration plan owned

Our only office is in Whitefield, Bengaluru, where clients can meet us in person. We work on transactions involving companies in any state, through data rooms, meetings and site visits. We do not have offices outside Bengaluru.

What is the M&A full form?

The M&A full form is Mergers and Acquisitions – the combination of companies or the purchase of control of a business through shares, assets or an undertaking.

What is the difference between a merger and an acquisition?

In a merger, two companies combine into one and shareholders of the merging company get shares in the surviving company. In an acquisition, a buyer purchases control of a business, which may continue as a separate company.

What are the types of M&A deals?

Mergers, share purchases, asset purchases, slump sales, demergers, joint ventures, reverse mergers and cross-border mergers.

What is a fast-track merger?

A merger under section 233 of the Companies Act approved by the Regional Director instead of the tribunal. From September 2025 it is available to more classes, including unlisted companies with borrowings up to ₹200 crore.

When is CCI approval needed?

When the transaction crosses the asset or turnover thresholds, or the deal value exceeds ₹2,000 crore and the target has substantial business operations in India, unless an exemption applies.

Is a merger taxable?

Mergers and demergers can be tax-neutral if the income-tax conditions are met. Share sales and slump sales are taxed as capital gains.

What does a due diligence report format for acquisition include?

An executive summary, scope, business overview, quality of earnings, net debt, working capital, tax and compliance review, material contracts, related parties and recommendations for price and protections.

What was the Reliance Disney merger?

A 2024 deal in which Viacom18's media and JioCinema businesses were combined with Star India into a joint venture valued at about ₹70,352 crore, controlled by the Reliance group, with Disney holding about 36.84%.

When was the Disney Jio merger completed?

On 14 November 2024, after approval from the Competition Commission of India in August 2024 with voluntary modifications.

What is the Land Acquisition Act 2013?

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which governs compulsory acquisition of land by the government. It is not about business M&A.

Is compensation under the Land Acquisition Act 2013 taxable?

Compensation under awards and agreements made under that Act is covered by a specific exemption, as clarified by the tax department; interest on enhanced compensation is generally taxable.

Is GST payable on the sale of a business?

The transfer of a business as a going concern is generally exempt; the sale of individual assets usually attracts GST.

Do you find buyers for businesses?

No. We are not brokers or investment bankers. We advise on structure, tax, valuation and due diligence, and work alongside the adviser you appoint to find buyers.

Can a foreign company buy an Indian company?

Yes, subject to the sector rules for foreign investment, FEMA pricing guidelines, reporting through the bank and any required approvals.

How long does an M&A deal take?

A private share purchase can close in a few months; a tribunal-approved merger often takes six months to more than a year.

How much does M&A advisory cost?

We do not publish fees. The cost depends on the deal's size, scope and timeline, and our team shares the exact total after reviewing your requirements.

Business Valuation · Due Diligence Audit · FEMA and FDI Compliance · Tax Planning · Business Contracts · Company and LLP Registration

Share the outline of the deal, the parties and your timeline. Our team will set out the structure options, the approvals likely to be needed and the information required, under a non-disclosure agreement.

Contact Details

Office Address

IMAK Advisory, ITPL Main Rd, Pattandur Agrahara, Whitefield, Bengaluru, Karnataka 560066, India

Phone

+91 79798 50684 (call or WhatsApp)

Email

imakadvisoryteam@gmail.com

Sources: Companies Act, 2013 (sections 230–234) and the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025 notified 8 September 2025 (IndiaCorpLaw); Competition Act, 2002 deal value threshold (from September 2024); Business Standard, 14 November 2024, on the Reliance–Disney joint venture; Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and CBDT Circular 36/2016. Checked 2 November 2026.