Otherwise known as the “regional director route”, this avoids ordinary tribunal sanction. But can it deliver the merger and secure every consent required to close? The deal is only ever as fast as the slowest consent.

Share purchase versus merger consents

In a share purchase, sellers receive their negotiated price directly and liabilities stay in the acquired company, although the buyer bears their economic risk and may seek warranties and indemnities from the sellers.

A merger instead extinguishes the target’s separate existence: the scheme must specify what shareholders get in exchange – cash, equity, or both – and the surviving company succeeds to the target’s liabilities as well as its assets, demanding upfront scrutiny of contingent claims and contractual consents. Cash is possible, but an all-cash merger may forfeit tax treatment available to qualifying amalgamations; an equity-offering buyer still needs an agreed exchange ratio and willing shareholders.

The consent problem is sharper still. Section 233(1)(b) requires each company’s scheme to be approved by members holding 90% of total shares, and section 233(1)(d) requires creditors holding 90% in value. The shareholder test counts all shares, not only votes cast; each company must separately meet the approval requirements. Promoters holding, say, 82% of the target cannot carry a scheme opposed by the remaining 18% on their own; buying that minority out instead reintroduces a preliminary share purchase.

Fast-track mergers demand higher consent

The irony is that the fast-track route imposes a stricter shareholder consent standard than the tribunal process it bypasses. The tribunal route needs a 75% majority of members or creditors present and voting. Section 233 requires 90% of total shares regardless of turnout, with absent or indifferent shareholders counting as against the scheme.

Bill lowers fast-track mergers thresholds

To address the consent hurdle, the Corporate Laws (Amendment) Bill, 2026, introduced on 23 March 2026, proposes a different approval test for fast-track mergers. It would require approval by a majority of members present, and voting of at least 75% in value of the shares they hold. It would also reduce the creditor threshold from nine-tenths to at least three-quarters in value.

For an acquirer, the change in shareholder denominator matters as much as the lower percentage: absent or abstaining shareholders would no longer count against approval, and a dissenting minority could not defeat the value test alone. A preliminary minority buyout might therefore be unnecessary, provided the majority-in-number requirement is met.

Although the bill has yet to be passed, it also raises a minority-exit issue: it contains no exit mechanism for shareholders who vote against, or do not vote. The committee has merely recommended a statutory fair-value exit or buyout, potentially leaving the right uncertain.

Without a prior framework settling funding and valuation, the open questions are practical: who funds a cash exit, when is the price fixed and how does a dissatisfied holder challenge it without freezing the deal?

The scheme also needs creditor support and applicable competition, sectoral or foreign investment clearances. Registrar of companies or official liquidator objections do not themselves require tribunal review. However, if the regional director finds the scheme against public or creditor interests, it may revert to the tribunal process, losing the timing advantage.

Fast-track path suits aligned stakeholders only

For now, direct fast-track mergers make most sense for aligned shareholders and supportive creditors. If minority consent is doubtful or the buyer seeks control without immediate absorption, a share acquisition followed by later integration remains more executable.

If parliament relaxes the thresholds, an effective minority exit will be central to the route’s credibility. Until then, the fast track is genuinely fast only for buyers who can satisfy its stricter consent requirements.

This article was originally published in India Business Law Journal on 12 October 20266 Written by: Devesh Pandey, Parter. Click here for original article

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