M&A News: 05/06/09

 

IBM TEAMS UP WITH INDIA GLYCOLS
Bangalore
The Economic Times  The Statesman  

Global firm IBM on Thursday announced that it had teamed up with India Glycols Limited, a market leader in India for Glycols and other value-added speciality chemicals, for enterprise IT infrastructure services.

As part of the agreement, IBM will host and manage the IT infrastructure, including IBM's state-of-the-art blade centre Nseries Storage System Solution, as well as the non-disruptive data migration and storage level data replication to its remote site, (IGL's plant) located in Kashipur, Uttarakhand.

The solution enables high performance, flexibility, scalability and efficient data management as well as effective total cost of ownership and return on investment for IGL, a company release said here today.

M&AS' COST TO INCREASE AS STAMP DUTY CEILING CEASES
Mumbai
Business Standard

The Maharashtra government’s proposal to remove the ceiling on stamp duty on mergers and acquisitions (M&As) will increase the cost of transactions of larger deals by companies registered in the state, according to industry experts.

State Finance Minister Dilip Walse-Patil, in his budget speech, proposed to remove the Rs 25-crore upper limit for stamp duty involved in M&As.

In Maharashtra, the stamp duty was 5 percent for property transactions and 0.7 percent for share transfer, said a tax expert.

“Large-cap companies would be forced to shift their base to lower tax areas outside Maharashtra. Essentially, this would increase the cost of larger transactions. The government should avoid similar investment-unfriendly moves,” said a senior executive with ABN AMRO.

The Confederation of Indian Industry (CII) also expressed concern over the removal of the ceiling on stamp duty. Maharashtra State Council Chairman Pramod Chaudhari said the restructuring of stamp duty on various agreements was a serious issue that required detailed study as this would have an impact on the industry to a great extent.

At present, Gujarat also has a ceiling on stamp duty for M&As at Rs 10 crore. Other states are charging 6 to 12 percent stamp duty, depending upon the value of immovable properties and value of shares, said a banker with a Mumbai-based corporate finance firm. The state finance minister also suggested amendments in the Bombay Stamp Act, 1958, and doubled the stamp duty on contract for advertisements, rights of telecasting films and copy rights. The move will create additional revenue from the individuals and institutions executing agreements of large sums, said Walse-Patil.

Officials of the state stamp duty and registration department, however, played down the impact of the stamp duty ceiling waiver, saying this was just a mere formality as such duty on any M&A deals in the state has never exceeded Rs 25 crore.