The BFI dominated Nepalese stock market has been absorbing the effects of merger and acquisitions in that very sector. In recent days, many Microfinance companies agreed to merge operations while commercial banks have been focusing more on merging with development banks and finance companies to increase their reach and expand the sale of operations.
The process of merger requires the trading of merging entities to be halted on the secondary market. As for the process of acquisition, the trading of company getting acquired is halted and the acquiring company’s trading is unaffected. Due to this, the trading in securities of many companies has been halted on NEPSE.
A list of companies undergoing the process of merger and acquisition has been prepared along with their respective dates on which the MoU was signed. Since, the trading is halted after the MoU is signed, the date of signing MoU has been referred to calculate the number of days that has elapsed since trading was halted till February 19, 2020. The list includes merging companies that are not listed on NEPSE, but will issue IPO post-merger.
It has been 281 days since MoU between Mirmire Laghubitta, Nagbeli Laghubitta and Kisan Laghubitta was signed but still the trading in the securities of the three companies is on halt. The most recent agreement was acquisition of Janakpur Laghubitta by Swarojgar Laghubitta.
Out of 20 on-going merger and acquisitions, only four have confirmed the share swap ratio while the remaining have been silent on the matter.
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