https://www.educba.

com/cross-border-merger-and-acquisitions/

https://enterslice.com/learning/cross-border-merger-and-acquisition-a-complete-analysis/

https://www2.deloitte.com/us/en/pages/mergers-and-acquisitions/articles/cross-border-m-and-a-
risks-rewards.html

https://taxguru.in/company-law/cross-border-merger-meaning-types-procedure-main-rules-
regulation.html

https://www.juscorpus.com/cross-border-merger-and-acquisition/

https://ksandk.com/mergers-acquisition/rise-of-cross-border-ma/4

intro

. There were no regulations on mergers and acquisitions for two decades, and when they were
finally introduced in 2011 under the Competition Act, 2002, they were rendered ineffective by
setting high thresholds, providing exemptions, and by narrowly focusing on competition

https://ksandk.com/mergers-acquisition/cross-border-mergers-and-acquisitions/

What are the legal issues involved in cross border mergers and acquisitions? A company's growth is
significantly aided by mergers and acquisitions (M&A). The companies enjoy manifold benefits,
including economies of scale, increased revenue, product variety, access to resources, and market
monopoly. Over the past few years, India's mergers and acquisitions market has shown a positive
trend, with many large international and domestic corporations choosing this strategy for growth.
Cross-border M&A refers to when a corporation seeks targets in another country
The procedure for cross-border M&As is very appealing and takes place on a global scale. The
challenges experienced will be different from those in domestic transactions. Legal repercussions,
cultural variations, variances in customer tastes and preferences, etc., may provide difficulties for
these cross-border transactions. Therefore, to ensure and avoid problems faced in cross
border mergers and acquisitions due diligence must be ensured at every step.

Regulatory Compliance Lacking Reforms

Stamp Duty a Matter of Concern

Tax Considerations
Incompetent Competition Act, 2000
The Act forbids merging businesses from abusing their dominating position. Businesses must
abide by the "Combination" regulations in cross-border transactions because they set
threshold restrictions for assets and turnover, which limit the application of the law.
Businesses are prohibited by the Competition Act from signing contracts that adversely affect
competition within the relevant market in India.

Due Diligence
The main component of an M&A transaction is due diligence. To help parties, close a deal,
this due diligence is a process that aids in confirming, looking into, and acquiring all
pertinent facts and information. A deal's structure and the terms of the transaction may alter
as a result of the due diligence process. It is a proper investigation that provides a thorough
history of any dangers and possibilities that may present themselves in the deal. The buyer
must make the most of this procedure to fully examine the target firm and conduct essential
acquisition-related actions. To avoid the challenges of cross border mergers and acquisitions
due diligence is crucial.

Paper

This article argues that India should not continue its reliance on FDI to achieve the goal of creating
an internationally competitive manufacturing sector. India should do more than establishing an FDI
review mechanism. Cross-border acquisitions must be subjected to strict scrutiny by a specialized
agency. Proactive and coordinated measures must be devised to encourage domestic enterprises.
Special attention must be given to providing long-term risk capital.

https://www.mondaq.com/india/maprivate-equity/695282/cross-border-mergers--key-
regulatory-aspects-to-consider

Cross-border mergers and acquisitions have rapidly increased reshaping the industrial
structure at the international level. A cross-border merger means any merger, amalgamation
or arrangement between an Indian company and a Foreign Company1 in accordance with
the Companies Act, 2013 and the Companies (Compromises, Arrangements, and
Amalgamations) Rules 2016.

The Ministry of Corporate Affairs notified Section 234 of the Companies Act, 2013 thereby
enabling cross-border mergers with effect from 13 April 2017. Thus, it was a matter of time
that the Reserve Bank of India notified the regulations in order to operationalize the cross-
border merger.

Regulatory Framework
In India, Cross border is majorly regulated under (i) the Companies Act 2013; (ii) SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations 2011; (iii) Competition Act
2002; (iv) Insolvency and Bankruptcy Code 2016; (v) Income Tax Act 1961; (vi) The
Department of Industrial Policy and Promotion (DIPP); (vii) Transfer of Property Act 1882;
(viii) Indian Stamp Act 1899 (ix) Foreign Exchange Management Act 1999 (FEMA) and other
allied laws as may applicable based on the merger structure

The two most relevant regulations under FEMA from a merger & amalgamation perspective
are Foreign Exchange Management (Transfer or Issue of Security by a Person Resident
Outside India) Regulations, 2000 (the FDI Regulations) and Foreign Exchange
Management (Transfer or Issue of any Foreign Security) Regulations, 2004 (the ODI
Regulations). In addition to this, the Reserve Bank of India (the RBI) has notified Foreign
Exchange Management (Cross-Border Merger) Regulations, 2018 (the Cross-Border
Regulation) under the Foreign Exchange Management Act, 1999 to include enabling
provisions for mergers, demergers, amalgamations and arrangements between Indian
companies and foreign companies covering Inbound and Outbound Investments. This is a
significant move as there will be a massive surge in the flow of Foreign Direct Investment
with the enactment of new laws and tweaking of existing policies.
Inward and outward was given

https://blog.ipleaders.in/top-5-tax-issues-cross-border-mergers-acquisitions/ - ITA-TAX
CENTRIC

ndian Companies Act, 2013 under Section 230 to 232 allows the merger of
companies through a scheme of arrangement provided the approval of the
National Company Law Tribunal is necessary for such arrangement.
Interestingly, the Indian Income Tax Act (ITA), 2016 does not use the term
‘merger’ but defines ‘amalgamation’ under Section 2(1B) of the act as the
merger of one or more companies with another company or the merger of
two or more companies to form a new entity. Thus, the merging company is
known as an ‘amalgamating company’

By virtue of the amalgamation;

 All the properties and the liabilities of the amalgamating company

should immediately become the properties and the liabilities of the
amalgamated company
 Shareholders holding at least 3/4th value in shares in the
amalgamating company excluding the nominee or the subsidiaries of
the amalgamated company become shareholders of the
amalgamated company

https://blog.ipleaders.in/applicable-competition-laws-rules-regulations-
respect-merger-amalgamations-acquisition-transactions/

Introduction
The Competition Act, 2002 (“The Act”) was enacted keeping up with the
economic developments, for the preservation and promotion of competition
in the Indian market by preventing practices that may cause or are likely to
cause an appreciable adverse effect on competition in India. The Act, apart
from prohibiting agreements that are anti-competitive in nature and abuse of
any position of dominance by enterprises, also regulates mergers,
amalgamations, and acquisition transactions, also referred to as
combinations.

These combinations are an everyday part of a growing economy like India.

We have seen in the recent past, major deals like Vodafone – Idea and
Reliance Jio – Facebook, among others. To make sure that the market
remains competitive, the Act envisages the regulation of such deals.

For the purpose of the regulation of combinations, the Act has three principal
sections. Additionally, the Commission is also empowered to regulate its own
procedure. To that end, The Competition Commission of India (General)
Regulations (“General Regulations”), 2009 and The Competition Commission
of India (Procedure in regard to the transaction of business relating to
combinations) Regulations, 2011 (“Combination Regulations”) are enacted to
regulate the Commission’s own procedure with respect to general affairs and
combinations respectively. The General Regulations provide a regulatory
framework for the overall working of the Commission while the Combination
Regulations provide a framework in cases involving combinations.

Now, let us look into the three principal sections that regulate combinations

As mentioned before, there are three sections that are used to regulate
combinations, viz. Section 5, Section 6 and Section 20. Section 5 defines
what would constitute a combination under the Act by providing for certain
situations involving, an acquisition, a merger or an amalgamation among
others. It also imposes certain monetary thresholds, which, if crossed, make
the transaction a combination. Once, a transaction falls under the narrowly
worded section 5 and becomes a combination, then it is regulated by section
6 of the Act. Section 6(1) declares that “no enterprise or person shall enter
into any combination which either causes or is likely to cause an appreciable
adverse effect on competition(“AAEC”) within the relevant market in
India” and makes such combinations void. To assess which combinations
cause AAEC within the relevant market, section 6(2) makes them notifiable
to the Commission. The Commission, on the basis of factors laid down under
section 20(4), either on its own motion or due to the notification caused by
section 6(2), inquires into whether a combination causes AAEC.

One recent case related to cross border M&A involving the Competition Commission
of India (CCI) is the acquisition of Future Retail Limited (FRL) by Reliance Industries
Limited (RIL) in 2020. The deal was worth approximately $3.4 billion and involved the
acquisition of FRL's retail, wholesale, logistics, and warehousing businesses.

The CCI conducted an investigation into the deal to determine if it violated India's
competition laws. The CCI's investigation focused on whether the deal would result in
a dominant market position for RIL in the retail sector and whether it would have an
adverse effect on competition in the relevant markets.

After conducting a detailed analysis of the relevant markets and the potential impact
of the deal, the CCI approved the acquisition subject to certain conditions. The CCI
required RIL to divest some of the assets it acquired from FRL and to ensure that
certain agreements between FRL and its suppliers were not affected by the
acquisition.

The CCI's decision was challenged by Amazon, which had previously invested in FRL
and claimed that the deal violated its contractual rights. The matter is currently
pending before the courts in India.
 This case highlights the CCI's role in regulating cross-border M&A transactions in
India and its commitment to ensuring fair competition in the relevant markets
Here are some other notable cases related to cross-border M&A transactions
involving the Competition Commission of India:

1. Walmart-Flipkart Deal: In 2018, Walmart acquired a 77% stake in Flipkart, an Indian

e-commerce company, for $16 billion. The CCI approved the deal subject to certain
conditions, including a requirement that Walmart would not discriminate against
sellers on its platform.
2. Bayer-Monsanto Merger: In 2018, Bayer AG, a German pharmaceutical and chemical
company, acquired Monsanto Company, an American agrochemical and agricultural
biotechnology company, for $63 billion. The CCI approved the deal subject to
divestitures of certain businesses to address competition concerns.
3. GlaxoSmithKline-Novartis Deal: In 2015, GlaxoSmithKline (GSK) and Novartis AG, a
Swiss pharmaceutical company, entered into a series of transactions involving GSK's
vaccines business and Novartis's over-the-counter healthcare business. The CCI
approved the deal subject to certain conditions, including a requirement that GSK
divest its meningitis vaccines business.
4. Vodafone-Idea Merger: n March 2017, Vodafone and Idea Cellular announced a
merger to create India's largest telecom company. The CCI approved the deal subject
to certain conditions.
5. HeidelbergCement-Italcementi: In July 2015, HeidelbergCement acquired
Italian cement company Italcementi, which owned a controlling stake in Indian
cement company Zuari Cement. The CCI approved the deal subject to certain
conditions.
6. Novartis-GlaxoSmithKline India: In December 2014, Novartis acquired
GlaxoSmithKline's oncology products, including the Indian subsidiary. The CCI
approved the deal subject to certain conditions.
7. SABMiller-AB InBev: In October 2016, Anheuser-Busch InBev acquired
SABMiller, which owned a controlling stake in Indian beer company SABMiller
India. The CCI approved the deal subject to certain conditions, including the
divestment of certain assets in India.
8. In 2021, CCI approved a cross-border merger between two pharmaceutical
companies, Mylan N.V. and Pfizer Inc. The merger involved Mylan N.V.
merging with Upjohn Inc., a subsidiary of Pfizer Inc., to form a new entity
called Viatris Inc. The merger was approved by the CCI subject to certain
conditions, including the divestiture of certain products and the transfer of
manufacturing facilities to a third party

Here are some notable cases post-2020 related to cross-border merger and
acquisition that have been reviewed by the Competition Commission of India (CCI):
1. Future-Reliance Deal: In August 2020, Reliance Industries announced its acquisition
of Future Group's retail, wholesale, and logistics businesses. The deal was opposed
by Amazon and went through a long legal battle. The CCI approved the deal in
November 2020 subject to certain conditions.
2. Carlyle-Mphasis Deal: In March 2021, American private equity firm Carlyle Group
acquired a majority stake in Mphasis, an Indian IT services company, from Blackstone.
The CCI approved the deal subject to certain conditions.
3. Invesco-Oaktree Deal: In June 2021, Invesco acquired Oaktree Capital Management's
real estate fund business in Asia. The CCI approved the deal subject to certain
conditions.
4. Kalpataru Power Transmission-Techno Electric Engineering Company: In December
2021, Kalpataru Power Transmission, an Indian engineering company, acquired a
majority stake in Techno Electric Engineering Company. The CCI approved the deal
subject to certain conditions.
5. Adani Total Gas-Reliance Gas Transmission: In December 2021, Adani Total Gas
acquired Reliance Gas Transmission. The CCI approved the deal subject to certain
conditions.
https://www.mondaq.com/india/antitrustcompetition-law/843858/merger-control-
comparative-guide

No special rules or regimes apply in specific sectors. However, the government of India
issues notifications from time to time, to exempt transactions involving parties in the
following sectors from the notification requirement:

 public sector enterprises in the oil and gas sectors;

 nationalised banks; and
 regional rural banks.

Notifiable transactions are reviewed and regulated by the Competition Commission of India
(CCI), a quasi-judicial body set up under the Competition Act, 2002 . The CCI has the
following powers:

 the power to approve transactions (Section 31(1));

 the power to disapprove/block transactions (Section 31(2));
 the power to impose modifications/conditions (ie, remedies) to a transaction (Section
31(1));
 the power to impose penalties for failure to comply with its orders (Section 42);
 the power to impose penalties for failure to comply with its directions (Section 43);
 the power to impose penalties for failure to notify a transaction (Section 43A); and
 the power to impose penalties for furnishing false or incomplete information on a
transaction (Sections 44 and 45).

Are foreign-to-foreign transactions covered by the merger control regime, and

if so, in what circumstances?
Yes. Foreign-to-foreign transactions are regulated by the CCI, subject to the financial
thresholds being met. The CCI, in Titan International/Titan Europe (C-2013/02/109), clarified
that foreign-to-foreign transactions resulting in an indirect acquisition of shares of a company
in India must be notified to the CCI

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the CCI also introduced key amendments to the Combination Regulations and issued
important decisions relating to gun-jumping and misrepresentation of information and
methodology of computing asset and turnover values in certain 'grey area' transactions.
Additionally, various important statutory exemptions, including the de minimis target
exemption, were renewed, causing a sigh of relief from all stakeholders. Over these
difficult times, the CCI has evolved as a regulator. It continues to respond well by
ensuring there are minimal delays in its merger review process, and has simplified
logistics and processes for parties and their advisers.
The Competition Act and the Combination Regulations also prescribe certain
exemptions; for instance: (1) minority acquisitions of less than 25 per cent shareholding,
provided that the acquisition is either 'solely for investment purposes' or is in the
'ordinary course of business' and does not lead to the acquisition of control; (2) creeping
acquisitions of between 25 per cent and 50 per cent shareholding without change in
control; and (3) purely internal reorganisations (subject to certain conditions).
Additionally, in 2017, the government also introduced a de minimis target-based
exemption, initially for a period of five years (until March 2022), pursuant to which
transactions in which the value of the enterprise being acquired, merged or
amalgamated (or in the case of an asset or business acquisition, the value of the assets
or business being acquired, merged or amalgamated) is less than 3.5 billion rupees in
India (or turnover attributable to the assets is less than 10 billion rupees in India) do not
need to be notified to the CCI (target exemption). In March 2022, the government
extended the validity of this exemption for another five years (until 28 March 2027).

Therefore, while the jurisdictional thresholds seek to cast a wide net, the exemptions
appropriately filter out transactions that are unlikely to raise any competition concerns,
ensuring that the notification process is well balanced

In January 2016, the Combination Regulations were amended to provide guidance on

the scope of 'solely for investment purposes' (which is a critical limb of the minority share
acquisition exemption discussed above). It was clarified that an acquisition of less than
10 per cent shareholding or voting rights of a target will be treated as solely for
investment purposes, provided the acquirer: (1) is able to exercise only rights of ordinary
shareholders, to the extent of their respective shareholding; (2) does not have or intend
to have a seat on the board; and (3) does not intend to participate in the management or
affairs of the target. This has provided much-needed clarity and has drawn a clear line in
the sand, especially for private equity investors who are regularly involved in minority
investments.

In November 2016, the CCI published FAQs for the first time, providing helpful informal
guidance to stakeholders on various merger control-related aspects. The CCI has
occasionally updated the FAQs, and certain important issues such as the methodology
for calculating turnover have been clarified through these FAQs. 5

In June 2017, in response to concerns raised by various stakeholders, the government

(in consultation with the CCI) removed the requirement of parties having to file a
notification form within 30 days of executing definitive documents. Initially, this
exemption was introduced for a period of five years (until June 2022); however, in March
2022, the government extended the validity of this exemption for an additional five years
(until June 2027). The previous 30-day timeline was a sticking point for parties as it was
insufficient for the preparation of a robust filing, or for aligning with filings in other
jurisdictions. Pursuant to this exemption, parties are now permitted to file at any time
before closing, adding a lot more flexibility to the process and aligning the regime with
international best practice.

In October 2018, the CCI introduced a number of helpful amendments to the

Combination Regulations, in particular allowing parties to 'pull and refile' a merger
notification (to avoid 'invalidations' of defective filings) and enabling parties to offer
remedies before the start of a detailed Phase II investigation. This has helped in
reducing the number of transactions that are required to enter a detailed Phase II
investigation.

n August 2019, in response to industry feedback that review timelines often acted as a
bottleneck and could even delay the implementation of non-problematic transactions, the
CCI introduced the 'green channel' route. Under this route, transactions in which there
are no horizontal overlaps, vertical relationships or complementary activities between the
parties (including their groups) will be 'deemed approved' on the day of filing the
notification form itself (in the prescribed format) with the CCI. This is a welcome change
and has greatly facilitated the government's 'ease of doing business in India' mission.
The CCI has been fairly constructive while allowing transactions to be notified under this
route, and has even allowed transactions 6 with minor vertical relationships to avail of this
route. A case-by-case analysis is required to be undertaken while assessing the
applicability of this route.

In March 2020, the CCI intr

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