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Manu Varghese

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Partner in the General Corporate Practice at the Mumbai Office of Cyril Amarchand Mangaldas. Manu specializes in mergers and acquisitions, private equity and joint ventures. He also focuses on cement sector transactions. He has advised on a wide range of complex matters involving foreign direct investments, cross-border mergers and acquisitions, joint ventures as well as routine general corporate matters. He can be reached at manu.varghese@cyrilshroff.com

India finally notifies Cross Border Merger Regulations

Previously, the provisions of the Companies Act, 2013 (Act) governing inbound and outbound mergers, amalgamations or arrangements between Indian companies and foreign companies (Cross Border Mergers) were notified by the Ministry of Corporate Affairs on April 13th, 2017. Subsequently, on April 26th, 2017, the Reserve Bank of India (RBI) issued draft regulations to govern Cross Border Mergers (Draft RBI Regulation).

We had published an earlier blog piece on this, discussing the key highlights of the Draft RBI Regulation, which is available here.

It has been close to a year since the Draft RBI Regulation and on March 20th, 2018, the RBI has finally notified the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 (Merger Regulation). This article briefly analyses the key changes brought about in the Merger Regulation and its implications.Continue Reading India finally notifies Cross Border Merger Regulations

Until recently, whilst it was possible for a foreign company to merge with an Indian company, it was not possible for an Indian company to merge with a foreign company within the court sanctioned merger framework set out under Indian corporate law. This finally changed in April 2017, when the company law provisions that govern cross border mergers were brought into force. In the same month, the Reserve Bank of India (RBI) also issued draft regulations setting out the conditions for obtaining ‘deemed’ approval from the RBI for cross border mergers. Now, companies in India desirous of merging with a foreign company may do so in specified jurisdictions.

Following are some of the key highlights of the recent regulations governing cross border mergers:

  • Jurisdiction Test

The eligible jurisdictions are: (a) those whose securities market regulator is a signatory to the Multilateral Memorandum of Understanding of the International Organisation of Securities Commission or to the Bilateral Memorandum of Understanding with the Securities and Exchange Board of India; or (b) jurisdictions whose central bank is a member of the Bank of International Settlements; and jurisdictions not identified in the public statement of the Financial Action Task Force (FATF) for deficiencies relating to anti-money laundering or combating terrorism financing or jurisdictions without an action plan developed with the FATF to address the deficiencies. Key countries like the USA, UK, Russia, Germany, France, Japan, China, Singapore, Mauritius, etc. will fall within the definition of eligible jurisdictions.
Continue Reading A New Dawn for India’s Cross Border Merger Regime