Amalgamation

Amalgamation is the legal process by which two or more companies combine to form a single entity — either by merging into one of the existing companies (merger) or by dissolving all entities and forming an entirely new company. In India, amalgamations are governed by the Companies Act, 2013 under Sections 230 to 232, requiring approval from the National Company Law Tribunal (NCLT), shareholders, creditors, and in certain cases, SEBI and stock exchanges for listed companies. Amalgamations can be of two types: amalgamation in the nature of merger (where the acquired company's assets and liabilities are absorbed into the acquiring company, and shareholders receive shares of the acquirer) and amalgamation in the nature of purchase (where the acquired company loses its identity and its shareholders receive a fixed consideration rather than continuing as shareholders in the combined entity). For Indian equity investors, corporate amalgamations are significant events that affect share prices, capital gains tax implications, and index constituent changes — SEBI requires listed companies to provide detailed information to shareholders including the swap ratio, valuation reports, and fairness opinions.