Rise Of Cross Border Mergers In India

In words of Justice Dhananjaya Y. Chandrachud, corporate reorganization is one of the means that can be employed to meet the challenges which confront business.

- Arushi Sralech

In words of Justice Dhananjaya Y. Chandrachud, ‘corporate reorganization is one of the means that can be employed to meet the challenges which confront business.’ Cross border merger is one such kind of arrangement which helps to meet the challenges as well as enter international market. Cross border mergers are deals between foreign companies and domestic firms in the target country.

Nowadays it is not sufficient for a business to be powerful in its own country; rather it should make a powerful presence worldwide. The percentage of cross border transactions in India has risen significantly. Cross border mergers have become a topic of interest mainly because they help a firm enter new international market. Cross-border merger helps in boosting the economy, expanding operations and markets and making good relations on international front.

Cross Border Mergers are demarcated into two types mainly:

Inbound Mergers

Inbound merger means when a foreign company merges into a company which is incorporated in India and the resulting company (Transferee Company) is an Indian company.

Outbound mergers

InOutbound merger, an Indian company merges into a foreign company situated in certain permitted jurisdictions and the resulting company (Transferee Company) is a foreign company.