# Merger and Amalgamation involving Foreign Companies

## Scope of Chapter XV

Chapter XV of the Companies Act, 2013 (relating to compromises, arrangements & amalgamations) shall apply to mergers & amalgamations between:
A company incorporated under the Companies Act, 2013, and
A company incorporated in jurisdictions notified by the Central Government (in consultation with RBI).

## Direction Outbound and Inbound Mergers

A company incorporated outside India may merge with a company incorporated under the Companies Act, 2013 or vice versa, with:
Prior approval of RBI, and
Payment of consideration in cash, Depository Receipts, or both.

## Key Points

Aspect	Requirement
Eligibility of foreign jurisdiction	Must be notified by CG
Approval needed	RBI prior approval
Consideration	Cash / Depository Receipts / Both
Governing chapter	Chapter XV

Worked example

### Example 1

Example: An Indian company wishes to merge with its parent based in Singapore. Since Singapore is among the jurisdictions notified by the CG, the merger can proceed under Chapter XV, subject to RBI's prior approval. The Indian shareholders may receive cash or Depository Receipts (or both) as consideration.

⚠️ Common exam mistakes

Assuming mergers with companies in any foreign jurisdiction are permitted — only notified jurisdictions are eligible.
Forgetting that RBI prior approval is mandatory in addition to NCLT approval under Chapter XV.
Believing only cash consideration is permissible — Depository Receipts or a combination is also allowed.

Reference: Section 234 of Chapter XV (read with this Chapter) — Companies Act, 2013

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Cross-Border Merger and Amalgamation

Worked example

⚠️ Common exam mistakes