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What are Inbound and Outbound Mergers and Acquisitions?

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PRIYA RAWAT

Before we jump on to understanding the meaning of inbound and outbound mergers and acquisitions, let’s first understand what only mergers and acquisitions mean.


Both the words, mergers and acquisitions mean the joining of two companies. However, there is a significant difference in the two terms based on how the two companies join together.


In case of a merger, two different entities join to form an all-new joint organisation. And, in the case of an acquisition, one entity is taken over by the other. 


Now that we are clear about what mergers and acquisitions are, let’s dive into the meaning of inbound and outbound mergers and acquisitions.


Inbound mergers and acquisitions

In simple terms, an inbound merger or acquisition is a transaction in which a foreign company joins with a domestic one. For instance, if a foreign based company merges or acquires an Indian one, it would be an inbound merger or acquisition in Indian scenario.


For example, in 2018, Walmart a US based company acquired Flipkart, an Indian company making it one of the largest inbound acquisitions in India.


Outbound mergers and acquisitions


Opposite of inbound, outbound merger or acquisition is a transaction in which a domestic company joins with a foreign one. For instance, if an Indian company merges or acquires a foreign one, it will be an outbound merger or acquisition in Indian scenario.


For example, in 2008 Tata Motors, an Indian company completed its acquisition of Jaguar Land Rover, a British company.


In short, inbound and outbound mergers and acquisitions are nothing but mergers and acquisitions that are cross-border. All international mergers and acquisitions are either inbound or outbound depending on which party’s perspective we are looking at them from.


There are various benefits to mergers and acquisitions, but along with the benefits, there are also various legal challenges and requirements to them. There is also a lot to consider as both countries have different government regulations, laws, cultures, languages, national security concerns, market restrictions etc. This makes the

process all the more complex.


This requires a special knowledge base and experience to deal with. And that’s why it is advisable to get in touch with a mergers & acquisitions attorney for the same. If you want to know more about outbound merger or acquisition for your company, get in touch with Saraf & Partners today and we shall guide you with the best of our talent.


Saraf and Partners is a modern full-service Indian law firm with over two and a half decades of experience in all major practice areas, including mergers & acquisitions. Our highly seasoned team has provided cutting-edge legal advice to many clients in the past and have successfully guiding them in their transactions keeping their

commercial interests at the core. We can guide you too. Connect with us now!

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