Cross Border Mergers In India And Ease Of Business

Bhavya Belwal, Jindal Global Law School

Introduction

The landscape of commerce being done worldwide has been changing slowly yet dramatically. With fire being fueled by the forces of digitalization and globalization, geographical obstacles are getting increasingly more porous. In the present day and age of globalization, companies, organizations around the globe are seeking to be able to create a marketplace which is international in true sense of the word. They no longer wish to remain limited to their home markets and are dynamically in search of possibilities for enlargement across borders. Cross- border mergers and acquisitions (M&A) represent one of the most potent ways to grow and explore strategies for corporations operating all over the world. Businesses stand to gain admission to fresh markets, customer bases, and new technologies through such agreements, which enhances potential for profit and thereby brings in a new sense of competitiveness.

Within the area of activity of mergers and acquisitions happening across borders, cross-border M&A holds specific importance. For overseas corporations, cross-border M&A provides a compelling opportunity to tap into the giant capacity of emerging economies like India. Our country, with its mushrooming populace, swiftly growing financial system, and increasing income of disposable nature, has come to be recognized and advertised to be a magnet for foreign direct funding (FDI).

A cross-border merger explained in its simplest form is a merger of two companies which are positioned in different countries and ensuing to form a different third company. A cross-border merger might contain an enterprise which is from India and merging with a foreign enterprise or vice versa. This means that the resultant entity would bring in foreign investment from the foreign enterprise.