Mergers and Acquisitions (hereinafter referred to as “M&A”) took over India in the late 1980s. Before the 1980s, companies did not indulge much in mergers and acquisitions due to the inadequacy of laws. However, 1988 witnessed one of themost unfriendly business acquisitions by Swaraj Paul to beat DCM Limited & Escorts Limited. This, in turn, started a wave of M&A in India, owing to the growing competition and globalisation. The years following 2006 came as a boon for M&A in India. However, with a shift in time, the methods need to be changed as well.

The authors, through this article, have tried to establish a nexus between blockchain technology and the Indian M&A landscape. Primarily, they have enumerated the aspect of M&A (in India), followed by the legality of blockchain technology in India. An analysis is then provided, which establishes a nexus between M&A and blockchain technology as a prospective idea, coupled with a case study.

Introduction to Mergers and Acquisitions in India

M&A has now formed an integral part of commercial India. With the onset of increasing competition, not just at the domestic level but also at the international level, businesses driven by profits engage in activities such as M&A. This not just aids the business in expanding their area of production and marketing but also helps improve infrastructure and resources leading to an overall increase in revenue and profits.

The Companies Act of 2013 enumerates the concepts of the merger underChapter XV of the Companies Act of 2013 (Section 230 to Section 240), which defines ‘compromises, arrangements, and amalgamations.’ Section 232 to Section 234 mention mergers which are defined as:

“A Merger is a combination of two or more entities into one, the desired effect being not just accumulation of assets and liabilities of distinct entities but organisations of such entity into one business.”

Thetone for mergers and acquisitions/corporate restructuring was set in the landmark case ofIon Exchange (India) Limited v. Unknown (2001). Here, the Hon’ble Supreme Court of India observed that:

“Corporate restructuring is one of the means that can be employed to meet the challenges and problems which confront a business. The law should be slow to retard or impede the discretion of corporate enterprise to adapt itself to the needs of changing times and to meet the demands of increasing competition. The law as evolved in the area of mergers, and amalgamation has recognised the importance of the Court not sitting as an appellate authority over the commercial wisdom of those who seek to restructures business.” 

The above definitions and judgments set the tone for mergers in India. There are basically four types of mergers- horizontal merger (A merger where two companies of similar nature of business merge), vertical merger (A merger between two companies that produce different goods but for one finished product), co-generic merger (A type of merger between two companies where they are similar to each other with regards to the customer base, functions, or any other aspect) and conglomerate merger (A type pf merger where two companies who are not related to each other in any aspect are merged). Now, when we speak of acquisitions, the same sections mentioned above come into play. However, that does not mean that there exists no difference between them. An acquisition, on the other hand, is the instance where one company takes over the business of the other company and establishes itself as the new owner of the company. In an acquisition, the buyer company purchases the target company, and the target company ceases to exist. However, under a merger, both companies decide to come together and function as one.

Introduction to Blockchain Technology and its Legality in India

With the rise of technology around the world, blockchain technology has made, and will continue to make a huge impact in the lives of people.Blockchain refers to an online distributed database that is shared among the ‘nodes’ of a computer network.The key point of difference between a standard database and a blockchain database is the structuring of the data. It is the structuring of data that gives blockchain technology a Unique Selling Point. Under blockchain technology, the data is collected in groups known as ‘blocks.’ When these blocks extinguish their storage capacities, they are linked to the previous block, and then a new block is formed. As a result, ‘blockchain’ is formed. This structuring of data under blockchain technology imbibes a notion of security and transparency as it does not require the role of an intermediary/third-party and has a record for everything. This blockchain technology, which is also known as Distributed Ledger Technology (hereafter “DLT”),has expanded its utility with the onset of cryptocurrencies, decentralised finance (DeFi) applications, Non-Fungible Tokens (NFTs), and smart contracts.

With the growth of blockchain technology in the world, India too decided to address the issue of blockchain technology in the country, and henceintroduced the“National Strategy on Blockchain”in the year 2021 under the Ministry of Electronics & Information Technology (MeitY). This strategy lays down the implementation of blockchain technology step-by-step in the Indian subcontinent. It has covered aspects like a roadmap for blockchain technology adoption, suggestions from the relevant stakeholders, strategies and outcomes. However, one must note that this is not legislation per se. The legal fraternity insisted on apt legislation for the same and requested the Union government to first focus on the issue of implementation of blockchain technology in India and then focus on an issue like that of admissibility of smart contracts in Indian courts, et cetera. Now, there lies a common misconception that ‘blockchain technology’ and ‘cryptocurrencies’ are used synonymously. As a result, a common perspective builds in the minds of the people that blockchain technology is illegal in India. However, such is not the case. As mentioned above, blockchain technology has garnered interest due to the explosion of cryptocurrencies around the world. However, the stance of the Union government has changed with time. After the landmark case ofInternet and Mobile Association of India v. Reserve Bank of India (2020), the circular issued by the RBI was quashed, which intended to ban the trading of cryptocurrencies as those guidelines were ‘unfair and unviable’ in the view of the Apex Court. However, via the Finance Act of 2022, the Union government imposed a30% tax on the income accrued from the transfer of Virtual Digital Assets (VDAs), under which even cryptocurrency has been placed. Furthermore, there are speculations that the Union government might introduce a piece of legislation that would ban all the private cryptocurrencies and only the digital currency which is to be issued by the RBI be made valid.

Nexus between M&A Transactions and Blockchain Technology: A Prospect

We find a long and cumbersome process when we talk of mergers and acquisitions not specific to India. Even in India, M&Ais a rather court-oriented and long-drawn process where the sanction of a High Court is required to give effect to the said merger or acquisition under section 394 of the Companies Act of 2013. As already mentioned above, the process of mergers and acquisitionsattracts an array of laws– Companies Act of 2013, Income Tax Act of  1961, Competition Act of 2002, Securities and Exchange Board of India (PTI Regulations) of 2015, to name a few. To comply with such guidelines and paperwork renders such processes tiresome and lengthy. However, with the introduction of blockchain technology in the M&A sector, it would help increase efficiency and reduce paperwork. In order to understand the aspects where these things could play a vital role, let us first understand the stages which are usually undertaken:

1. Infrastructure scaling: Where the infrastructure of both companies is evaluated to facilitate the process of M&A.

2. Functional integration: It essentially involves merging the product line and the services of the companies involved in a merger.

3. Data migration: All the required data of the companies involved in the merger are migrated as a form of exchange to carry out due diligence or other allied aspects.

4. Operating model: When an M&A typically takes place, the operating model(s) of the companies involved in the merger are merged as well. This includes the process of the operations and the staff.

Now, alot of mergers are rendered useless due to issues like the absence of technology to accommodate complex processes for integration and data migration. However, with the onset of blockchain technology, these problems could be easily tackled. With the introduction of DLTs to the entire process, the data sharing process between the two parties could be ensured in a secure way, as the data in the blockchain could be accessed only by the parties involved, without the presence of a third-party. DLTs also provide for a system of data migration, where data is transferred from one blockchain to another. This is just one facet of how M&A would benefit from blockchain technology. The others include:

1. Smart contracts: The aspect ofsmart contracts is relatively new to the international community. Smart contracts refer to those contracts where the agreement between the two parties has been embedded in the line of code. This agreement, in turn, has been distributed in a blockchain technology network and is closed only when the conditions for the closing of such contracts are met. These smart contracts can be traced and are transparent to both parties to the agreement without employing a third party. This could prove highly beneficial to the M&A deals, as it not just ensures transparency between the two parties but also generates trust regarding the asset transfer and data migration, coupled with minimal paperwork. However, one must also note that the ‘admissibility’ of smart contracts is still under question here. As mentioned above, the National Blockchain Technology Strategy of 2021 has failed to address this issue, and the legal fraternity has also raised concerns regarding the same.

2. Due Diligence: When certain companies are set to go ahead with M&A, due diligence forms their backbone. Due diligence refers to the evaluation and research of the background information about the companies being merged. This due diligence acts as an instrument to assess and churn out information about the potential liabilities or any other discrepancies arising from the proposed deal. Essentially, this due diligence in M&A is carried out either via a data room method or by giving a questionnaire. Under the data room method, a large amount of data is presented to the parties present in making the deal, and they are then required to assess the same. However, there exists one discrepancy regarding the same. Due to huge chunks of data, either of the parties does not assess the same property, and these mergers are signed without the requisite authority. However, with the presence of blockchain technology,such aspects could be avoided. A blockchain could be created in the smart contracts themselves, where the section of due diligence could be stored and, once assessed, be signed by the parties. A timestamp would be provided to show when the said document signed with complete information, and the liability could be placed if and when any discrepancy arises.

Recent M&A Deal in the Blockchain Sector

There has been a rise in M&A deals in the blockchain sector, and as per aPrice Waterhouse Coopers (PwC) report, the value of M&A deals in the cryptocurrency space jumped by nearly 5,000 percent in 2021 amounting to nearly $55 billion. Recently, Bharti Airtel Limited acquired a strategic stake in Singapore-based Aqilliz under the Airtel Start-up Accelerator Program. Specifically, this strategic stake in Aqilliz is treating ‘blockchain as a service company.’

Aqilliz, a Blockchain as a Service Company offers middleware technology that enables an interoperable and collaborative digital marketing ecosystem that helps enterprises perform advanced analytics on a federated layer and records such processing of activities on a distributed ledger. Aqilliz’s patented hybrid blockchain platform, Atom integrates differential privacy and federated learning on a distributed digital ledger and allows brands to create secure and consent-based solutions to engage with customers in an increasingly decentralised digital economy.

Bharti Airtel Limited is an integrated communications solutions provider, and its retail portfolio includes streaming services, Airtel Xstream Fiber, high-speed 4G/4.5G mobile broadband, digital payments, and financial services. For enterprise customers, Bharti Airtel Limited offers cyber security, Ad Tech, cloud, and data centre services, IoT and cloud-based communication. Bharti Airtel Limited aims to deploy Aqilliz’s blockchain technologies at scale across its Adtech, Digital Entertainment and Digital Marketplace offerings. This move is being seen as one of its kind, as it registers the commencement of new kind of blockchain technology in India.


The primary purpose of an M&A deal is to attain peaceful collaboration between the two companies and expand the buyer company. The buyer company looks out for a target company that increases its assets, and the target company looks out for a buyer company that reduces its liabilities to create a win-win situation for both companies. M&A plays a vital role for a company in expanding its market share and exploring more growth opportunities through advanced technology and highly qualified professionals. 

Blockchain technology may even help streamline the long and tedious process of M&A, as in the Blockchain, each network user represents a node. Every node validates the transmission of data, and as each block is cryptographically connected, it provides maximum security to personal and confidential information protecting it from cyber-attacks. Moreover, the permanent and chronological sequencing of data improves transparency. Therefore, blockchain provides security and transparency, which increases its value manifold.

Through Blockchain technology, people can transact in a more transparent, auditable, and secure manner, due to which there is arise in mergers and acquisitions in the blockchain sector and this technology is continually being integrated into various aspects.

Companies like Bharti Airtel Limited are investing in research and development in order to develop advanced technologies like Blockchain and improve its applicability so that the same can be used across all sectors leading to overall growth in the country.

About the Authors 

Adv. Manmeet Singh Marwah is an Advocate at Delhi High Court.

Abeer Tiwari is a 3rd-year B.A. LL.B student from Balaji Law College, Pune, and is an Associate Editor at IJPIEL.

Editorial Team 

Managing Editor: Naman Anand 

Editors-in-Chief: Jhalak Srivastava & Muskaan Singh 

Senior Editor: Hamna Viriyam 

Associate Editor: Abeer Tiwari

Junior Editor: Parishti Kaushik

Preferred Method of Citation  

Manmeet Singh Marwah and Abeer Tiwari, “The Dawn of Blockchain Technology in the Indian Mergers and Acquisitions Landscape” (IJPIEL, 4 July 2022) 


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