M&A transactions can become complex when Employee Stock Option Plans (ESOP) are involved. Our Partner, Adhunika Premkumar, outlines some key considerations relating to ESOPs in M&A in India.
She highlights the immediate issues parties should evaluate, including the impact of liquidity waterfall in M&A, and of holdbacks and post-closing adjustments, on share price. Another crucial element to consider for ESOP structuring in India is employee sentiment in the context of employee retention strategies in M&A.
Adhunika goes on to discuss some complexities that arise from ESOP schemes administered through trusts as well as deals involving global ESOP policies. She concludes by offering practical guidance for companies with ESOPs that are preparing for M&A, to help anticipate issues and streamline the investment transaction.
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