1. The provisions of this Chapter unless otherwise provided under any other law for the time being in force, shall apply mutatis mutandis to schemes of mergers and amalgamations between companies registered under this Act and companies incorporated in the jurisdictions of such countries as may be notified from time to time by the Central Government:
Provided that: the Central Government may make rules, in consultation with the Reserve Bank of India, in connection with mergers and amalgamations provided under this section.
2. Subject to the provisions of any other law for the time being in force, a foreign company, may with the prior approval of the Reserve Bank of India, merge into a company registered under this Act or vice versa and the terms and conditions of the scheme of merger may provide, among other things, for the payment of consideration to the shareholders of the merging company in cash, or in Depository Receipts, or partly in cash and partly in Depository Receipts, as the case may be, as per the scheme to be drawn up for the purpose.
Explanation.- — For the purposes of sub-section (2 ), the expression "foreign company" means any company or body corporate incorporated outside India whether having a place of business in India or not.
Legal Commentary & Landmark Judgments: Section 234
Section 234 of the Companies Act, 2013 regulates cross-border mergers and amalgamations between Indian and foreign companies, establishing statutory parity for inbound and outbound mergers subject to prior Reserve Bank of India approval and compliance with FEMA regulations.
In cross-border mergers under Section 234, verify whether the transaction qualifies for deemed RBI approval under the Foreign Exchange Management (Cross Border Merger) Regulations, 2018 (e.g., meeting external commercial borrowing caps or overseas direct investment guidelines). Plead compliance with Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, and annex the certified valuer's report conforming to internationally recognized valuation standards to secure swift NCLT sanction.