Overseas Contractual Mergers And The Takeover Code

The Securities and Exchange Board of India (SEBI) in an informal guidance letter to Xchanging Solutions Limited recently made public, has given a view that contractual mergers effected in foreign jurisdictions which per se do not follow a merger approval process similar to India (ie with blessings of a  court / tribunal), despite regulatory oversight (and including shareholders' approval), would not be exempted from open offer obligations under the Securities and Exchange Board of India (Substantial Acquisitions of Shares and Takeovers) Regulations 2011 (Takeover Code). For context, the relevant merger exemption under the Takeover Code states that any substantial acquisition pursuant to a scheme of arrangement or reconstruction plan (including amalgamations / mergers / demergers) directly or indirectly involving an Indian listed company must be pursuant to an order of a court / tribunal / competent authority, in India or overseas.