As globalization intensifies and companies look for expansion beyond domestic markets, cross-border mergers and acquisitions (M&As) have become a powerful strategic tool. For Indian businesses, these M&As offer access to advanced technologies, new markets, and global talent. For foreign companies entering India, they provide a foothold in one of the world’s fastest-growing economies.
What are Cross-Border Mergers & Acquisitions?
Cross-border M&As involve transactions where a domestic company merges with or acquires a foreign entity, or vice versa. The deal may involve acquisition of assets, shareholding control, or complete merger between entities based in different countries.
They are governed in India by:
- Companies Act, 2013 (especially Sections 230–234)
- Foreign Exchange Management Act (FEMA)
- Competition Act, 2002
- Income Tax Act, 1961 (for tax treatment of gains and valuations)
Cross-border M&As may take the form of:
- Inbound M&A: Foreign company acquires or merges with an Indian company
- Outbound M&A: Indian company acquires or merges with a foreign company
Benefits of Cross-Border M&As
For Indian Companies:
- Global footprint and brand diversification
- Access to new technologies and R&D
- Entry into new customer segments
- Economies of scale and sourcing
For Foreign Companies:
- Access to Indian market and its demographic advantage
- Cost-effective manufacturing and skilled labor
- Regulatory and tax incentives in special zones
- Strategic partnership with local players
Famous Cross-Border M&As Involving Indian Companies
1. Tata Motors – Jaguar Land Rover (UK)
- Year: 2008
- Value: $2.3 billion
- Nature: Acquisition
- A landmark deal where Tata Motors acquired the luxury British car brands from Ford, turning around their fortunes.
2. Bharti Airtel – Zain Telecom (Africa)
- Year: 2010
- Value: $10.7 billion
- Nature: Acquisition
- Enabled Airtel to enter 15 African countries, making it a global telecom player.
3. Tata Steel – Corus Group (UK)
- Year: 2007
- Value: $12.9 billion
- Nature: Acquisition
- One of India’s largest overseas M&As, making Tata Steel the 5th largest steelmaker at the time.
4. Dr. Reddy’s – Betapharm (Germany)
- Year: 2006
- Value: $570 million
- Nature: Acquisition
- Helped Dr. Reddy’s establish a significant presence in Europe.
5. Infosys – Lodestone (Switzerland)
- Year: 2012
- Value: $350 million
- Nature: Acquisition
- Strengthened Infosys’s presence in Europe, particularly in SAP consulting.
Notable Inbound M&As: Foreign Firms Investing in India
1. Walmart – Flipkart (India)
- Year: 2018
- Value: $16 billion
- Nature: Acquisition (77% stake)
- One of the biggest inbound FDI deals, giving Walmart a major presence in Indian e-commerce.
2. Vodafone – Hutchison Essar (India)
- Year: 2007
- Value: $11.1 billion
- Nature: Acquisition (67% stake)
- Marked Vodafone’s entry into the Indian telecom market.
3. Facebook (Meta) – Jio Platforms (India)
- Year: 2020
- Value: $5.7 billion
- Nature: Minority Stake (9.9%)
- Strengthened Facebook’s position in India’s digital ecosystem, especially in commerce and payments.
4. Unilever – Hindustan Unilever Consolidation
- Year: Multiple phases (2013 onwards)
- Nature: Increased stake in Indian arm
- Strengthened Unilever’s control over its high-growth Indian operations.
Challenges in Cross-Border M&As
- Cultural and language barriers
- Regulatory and compliance hurdles (FEMA, FDI caps, competition law)
- Taxation and transfer pricing issues
- Currency volatility
- Political and geo-strategic risk
Conclusion
Cross-border M&As offer an unmatched growth strategy when executed with due diligence, compliance, and integration planning. Indian firms are no longer just recipients of foreign investment—they are now active acquirers, shaping global markets. Likewise, India continues to be a magnet for inbound M&As due to its growth potential.
With evolving legal frameworks, digital tools for due diligence, and liberalized FDI norms, the trend of cross-border transactions is only expected to grow.
Looking to explore a cross-border M&A deal? Our experts can guide you through structuring, compliance, valuation, and post-deal integration for seamless execution.
