Cross-Border M&A9 min read

    Cross-Border M&A Between Europe and India: A Practical Guide

    Cross-border M&A between Europe and India is one of the most active corridors in global dealmaking — and also one of the most structurally underserved at the mid-market level. This guide sets out where the opportunity sits, how the 2024 reforms changed the rules for cross-border share swaps, the deal structures most commonly used, and the regulatory map every acquirer should understand before opening a mandate.

    The mid-market corridor is underserved

    Transactions in the USD 100 million to USD 1 billion range are structurally underserved. Tier-1 global advisors concentrate on megadeals above USD 1 billion, where league-table economics make the work attractive; local Indian boutiques often lack sustained European origination. The result: acquirers on both sides frequently work with advisors that are strong on one side of the transaction and weak on the other.

    The volumes justify the focus. According to Baker McKenzie's analysis of the Indian M&A market, mid-market acquirers accounted for nearly half of all India M&A activity in 2023, and mid-market deals grew from 20% to 35% of total deal volume between 2022 and 2023. Inbound M&A rose from 27% of overall Indian activity in 2022 to 41% in 2023, led by US and European strategic investors in financial services, technology, manufacturing, healthcare and renewable energy.

    What changed in 2024: cross-border share swaps

    The Foreign Exchange Management (Non-debt Instruments) (Fourth Amendment) Rules 2024, notified on 16 August 2024, materially liberalised cross-border share-swap structures. Rule 9A now permits both FDI–ODI swap transactions and secondary FDI–FDI swap transactions under the automatic route, removing the prior-RBI-approval requirement that had constrained such structures. Valuation in any cross-border share swap must be performed by a SEBI-registered merchant banker, or by an investment banker registered in the host country.

    For European groups using shares as acquisition currency — and for Indian acquirers of European targets — this is a meaningful simplification that widens the set of viable structures.

    The main deal structures

    • European or US strategic acquirer of an Indian target — buy-side advisory across origination, valuation, due-diligence coordination, FEMA / NDI Rules compliance, structuring, documentation and closing. Most active in financial services, technology, manufacturing, healthcare and renewables.
    • Indian acquirer of a European target (ODI route) — support under the Overseas Investment Rules 2022, including share-swap consideration mechanics, Form FC reporting to the RBI, and coordination with authorised dealer banks.
    • Cross-border share swaps — under the liberalised post-2024 NDI framework described above.
    • Carve-outs, joint ventures and strategic minority investments — where full acquisition is not the optimal path: minority stakes with governance rights, technology-plus-equity, JV formation, and carve-outs of Indian units from multinational groups.

    The regulatory map

    Cross-border M&A involving Indian companies is governed by an interlocking framework. The provisions that most often shape a deal:

    • FEMA / NDI Rules (as amended in 2024) — equity instruments held by non-residents, pricing guidelines and share-swap structures.
    • Overseas Investment Rules 2022 — outbound investment by Indian entities, including share-swap consideration.
    • SEBI Takeover Code — acquisitions of listed Indian companies, with open-offer triggers at 25% / 26% / 50%.
    • Competition Act (CCI) — including the September 2024 Deal Value Threshold (INR 20 billion, ~USD 240 million), which requires CCI approval above the threshold where the target has substantial Indian operations, regardless of asset or turnover tests.
    • Tax — share swaps are not automatically tax-neutral in India unless structured through a qualifying merger or demerger; the India–Switzerland, India–Italy, India–France and India–Germany double-tax treaties may provide relief.

    On the European side, mandates are structured to comply with the applicable national regimes — French AMF, Italian Consob, German BaFin and Swiss FINMA frameworks where relevant.

    Timelines and how a mandate begins

    Mid-market cross-border transactions typically run six to twelve months from mandate to closing, depending on jurisdiction, sector, regulatory complexity and target cooperation. The standard workflow follows institutional practice: origination and target identification; indicative valuation and structuring; approach under an NDA; due-diligence coordination; definitive documentation; regulatory approvals (RBI, SEBI, CCI and sector regulators as triggered); and closing with post-closing support.

    How IndoWest works

    IndoWest Capital provides European-side origination, structuring and process management, in association with Equirus Capital — a SEBI-registered Category I Merchant Banker that has advised on more than 315 transactions with cumulative deal value above USD 14.9 billion. The combined structure pairs European origination with Indian regulatory and execution depth in a single coordinated mandate.

    Read the full scope on our cross-border M&A advisory page, explore our India private-equity and fund advisory, or learn about the partnership. To open a confidential discussion, please get in touch via our contact page with the use case, target jurisdiction, indicative deal size and timing.

    This article is general information for corporate and professional audiences and is not legal, tax or investment advice. IndoWest does not provide investment management or activities reserved to SEBI-registered intermediaries; Indian-side execution is performed by Equirus Capital Limited.

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