NEW DELHI: India has rolled out the long-awaited regulations to allow cross-border mergers and amalgamation that could boost foreign direct investment into the country.
The Reserve Bank of India (RBI) has framed the regulations for mergers amalgamation and arrangement between Indian and foreign companies.
The Foreign Exchange Management (Cross Border Merger) Regulations, 2018, will cover both inbound and outbound investments.
The ministry of corporate affairs had already notified Section 234 of the Companies Act, 2013, paving the way for merger and amalgamation of a foreign company with an Indian company and vice-versa.
With the RBI framing the regulations under FEMA, the regulations can now take effect.
“The notification of FEMA (Cross-Border Merger) Regulations, 2018, is the last leg of legal provisions which finally come in existence to allow both inbound and outbound mergers of companies in India,” said Manoj Kumar, partner & head – M&A and insolvency resolution services at Corporate Professionals.
“The real beneficiaries of these regulations would be MNCs which in many cases want to consolidate the business of a region and require mergers involving an Indian company with other companies in foreign jurisdictions. The clarity of law also makes corporate planning possible for all Indian business houses having an overseas business,” he added.
Source: economictimes.indiatimes.com