"While the Companies Act, 2013, provides the enabling provision for cross border mergers, such mergers trigger a range of compliance obligations under other key legislations also, including the Foreign Exchange Managemen

1. Foreign Exchange Management Act, 1999 (FEMA): The Foreign Exchange Management (Non-Debt Instrument) Rules, 2019 and Foreign Exchange Management (Overseas Investment) Rules, 2022 & Regulations, 2022 are extremely important pieces of legislation for allowing foreign investment in India and The Regulations govern acquisition/transfer of equity instruments by non-residents and overseas investments by Indian residents, thereby, directly impacting the structuring of cross-border mergers. In addition to this, the Reserve Bank of India (the RBI) has notified Foreign Exchange Management (Cross-Border Merger) Regulations, 2018 under the Foreign Exchange Management Act, 1999. These Regulations specifically deal with cross border mergers and contain provisions pertaining to mergers, demergers, amalgamations and arrangements between Indian companies and foreign companies. These regulations also discuss the concepts of inbound and outbound investments. If the foreign company is a JV/WOS of an Indian Company, then it is required to adhere to the conditions mentioned in (Overseas Investment) Rules & Regulations, 2022. Further, if the inbound merger of the JV/WOS leads to the acquisition of a subsidiary of the JV/WOS, then it is required to comply with the ODI Regulations, specifically regulations 6 and 7. If in an outbound merger, shares are being acquired by a person resident in India, then such acquisition becomes subject to the ODI Regulations as prescribed by the RBI. 2. The Competition Act, 2002: The Competition Commission of India (CCI) regulates the mergers in order to prevent the rise of monopolistic mergers. While mergers help in creating economies of scale and lead to increase in profits, they may also contribute to the creation of monopolistic structure. CCI examines combinations that may cause an appreciable adverse effect on competition (AAEC). Hence, mergers are made subject to the competition laws of the country. The CCI has to assess and inquire into any merger which may have an adverse impact on the healthy competition in the market. While making such assessment as to the adverse effects the commission takes account of a number of factors such as actual and potential level of competition through imports in the market, extent of barriers to entry into the market, level of combination in the market etc. Even a likelihood of causing of adverse impact is adequate for the competition commission to rule that the merger is creating an adverse impact. If the merged enterprise created post a cross-border merger possesses assets worth more than US $ 1 bn, or turnover more than US $ 3 bn; or the group to which the merged enterprise belongs possesses assets worth more than US $ 4 billion, or turnover more than US $ 12 billion then the competition commission is required to examine such combination. Conflict of Jurisdictions is another such problem wherein whether or not the merger would affect the competition in the market positively or negatively would depend on the market situation which is unique to every country.