Thursday, December 6, 2007

Takeover Code - India - 5 Takover Law Cases

No open offer in Akzo Nobel’s ICI buyout

ET, 19 Dec 2007 page 9

Akzo Nobel is acquiring ICI in a deal valuing it at $8 billion.

The transaction is being done through a scheme of arrangement. This is similar to the Tata Corus deal too, which was implemented through a scheme of arrangement.

Sebi’ SAST rules have a clause that permits schemes of arrangement to avoid open offer.

Clause 3 of the regulations deal with the non-applicability of Clause 10 and 12, which require an open offer to be made.

Clause 3 (1) (j) (ii) says if a change in control happens, because of an arrangement or reconstruction, including amalgamation or merger or demerger under any law or regulation, Indian or foreign, then the takeover regulation which trigger an open offer will not apply.

Even though ICI case is an acquisition like Corus case, because the transaction is structured as a scheme of arrangement, its gets an exemption from making an open offer in India.

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