Merger Agreement Template for India

A Merger Agreement spells out the terms and conditions when two companies join forces to become a single entity. These legally binding contracts, governed by India's Companies Act 2013, detail everything from share exchange ratios and asset transfers to employee retention policies and post-merger management structures.

Beyond the basic deal terms, these agreements protect both companies through vital clauses covering confidentiality, non-compete restrictions, and regulatory approvals from bodies like SEBI and the Competition Commission of India. They also outline specific conditions that must be met before the merger can close, helping ensure smooth integration while managing legal and financial risks.

Companies need a Merger Agreement when combining operations with another business through acquisition or consolidation. This essential document becomes crucial during strategic expansion plans, market consolidation efforts, or when seeking operational synergies with complementary businesses under Indian corporate law.

The timing for drafting the agreement typically aligns with initial board approvals and due diligence completion. It's vital to have this in place before seeking regulatory clearances from SEBI or the Competition Commission of India, and before approaching shareholders for their approval. Many companies initiate this process during confidential negotiations, ensuring all terms are properly documented before any public announcements.

• Merger Contract: Basic agreement for straightforward mergers, focusing on core terms and conditions for combining two entities
• Company Acquisition Agreement: Detailed version for complete takeovers, including specific provisions for asset and share transfers
• Merger And Acquisition Term Sheet: Preliminary document outlining key deal points before drafting the full agreement
• Agreement And Plan Of Merger: Comprehensive version with detailed integration planning and post-merger operational structures
• Combination Agreement: Specialized format for complex transactions involving multiple entities or hybrid merger structures

• Board of Directors: Responsible for initiating and approving the Merger Agreement, setting strategic direction, and ensuring shareholder interests are protected
• Corporate Legal Teams: Draft and review agreement terms, ensure compliance with Companies Act provisions, and coordinate with external counsel
• Investment Bankers: Advise on valuation, deal structure, and financial terms while helping negotiate key agreement provisions
• Shareholders: Must approve the merger through special resolution, directly affected by share exchange ratios and rights
• Regulatory Bodies: SEBI, Competition Commission, and Stock Exchanges review and approve merger terms before implementation
• Company Secretaries: Handle documentation, ensure statutory compliance, and manage regulatory filings

• Company Details: Gather incorporation certificates, board resolutions, and shareholding patterns of both merging entities
• Financial Information: Collect valuation reports, audited financial statements, and share exchange ratio calculations
• Due Diligence: Complete thorough review of assets, liabilities, contracts, and pending litigation of both companies
• Regulatory Compliance: Check SEBI guidelines, Competition Act requirements, and industry-specific regulations
• Integration Plan: Document post-merger management structure, employee retention policies, and operational strategies
• Draft Generation: Use our platform to create a customized Merger Agreement that automatically includes all required elements
• Internal Review: Have key stakeholders verify accuracy of terms, conditions, and representations before finalizing

• Party Details: Full legal names, registration numbers, and registered addresses of merging entities
• Transaction Structure: Share exchange ratio, consideration details, and transfer of assets and liabilities
• Conditions Precedent: Required approvals, regulatory clearances, and pre-closing obligations
• Representations & Warranties: Statements about company status, financial position, and legal compliance
• Employee Provisions: Terms for transfer, benefits continuation, and service recognition
• Governing Law: Explicit reference to Indian Companies Act 2013 and jurisdiction details
• Termination Rights: Grounds for cancellation and consequences of breach
• Confidentiality: Protection of sensitive information and trade secrets during merger process

A Merger Agreement differs significantly from a Business Acquisition Agreement, though both involve combining business entities. The key differences lie in their structure, implementation, and legal implications under Indian corporate law.

• Legal Structure: Merger Agreements result in two companies becoming one legal entity, while Business Acquisition Agreements involve one company purchasing another while maintaining separate legal identities
• Asset Treatment: In mergers, all assets and liabilities automatically transfer to the merged entity, whereas acquisitions specifically detail which assets and liabilities are being purchased
• Regulatory Requirements: Mergers need mandatory NCLT approval and face stricter SEBI scrutiny, while acquisitions may proceed with simpler regulatory clearances
• Shareholder Impact: Merger Agreement shareholders typically receive shares in the new entity, while acquisition shareholders usually receive cash consideration
• Post-Deal Integration: Mergers require complete operational integration, whereas acquisitions can maintain varying degrees of operational independence