NCLT Mumbai Allows First Motion In Flexim Flow–Emerson Merger, Orders Shareholders' Meeting

The Mumbai Bench of the National Company Law Tribunal (NCLT) on 4 May allowed the first motion application seeking approval of a merger scheme between Flexim Flow India Private Limited and Emerson Process Management (India) Private Limited, while holding that shareholder approval could not be dispensed with as consent affidavits were not received from all equity shareholders of the transferee company.

Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan passed the order in an application filed under Sections 230 to 232 of the Companies Act, 2013, and directed the transferee company to convene a meeting of its equity shareholders through video conferencing or other audio-visual means within 60 days.

The boards of both companies approved the merger scheme on 4 March 2026, under which Flexim Flow India Pvt Ltd, a wholly owned subsidiary, would merge into Emerson Process Management (India) Pvt Ltd, with 1 April 2026 fixed as the appointed date.

Emerson Process Management (India) Pvt Ltd manufactures and deals in engineered industrial equipment, including pumps, valves and industrial instruments, while Flexim Flow India Pvt Ltd functions as its wholly owned subsidiary.

The companies submitted that the merger would integrate operations, reduce compliance and operational costs, eliminate duplication, improve resource utilisation and simplify the group structure.

During the proceedings, the Tribunal noted that although the transferor was a wholly owned subsidiary and no fresh shares were to be issued, only three out of five equity shareholders of the transferee company had filed consent affidavits.

The Bench therefore declined to dispense with the shareholders' meeting and directed that it be conducted electronically within the stipulated timeline.

It dispensed with meetings of unsecured creditors after noting that the post-merger net worth of Emerson Process Management would remain positive at around Rs. 1,698.64 crore and that creditor interests would not be adversely affected.

The Bench also directed issuance of notices to the Regional Director, Registrar of Companies, Income Tax authorities and GST authorities.

Accordingly, the NCLT allowed the first motion application.