The legal framework for M& A includes the following:

• Companies Act 2003

• The Competition Act 2002

• SEBI Take over Code 1994

• Foreign Exchange Management Act 1999

• The Indian Income Tax Act 1961

• Mandatory permission by court

• Intellectual property due diligence

• CCEA Approval :- Under the FDI Policy, any proposal with total equity inflow of more

than INR 12,000 million requires the approval of the Cabinet Committee on Economic

Affairs (“CCEA”), after the same has been approved by FIPB. The Deal was approved by

the CCEA on October 3, 2013.

• SEBI Approval:- As per the Regulation 3(1) of the Takeover Code, an acquirer, together

with persons acting in concert cannot acquire shares or voting rights in a target company

which would entitle them to exercise 25% or more of voting rights in such target

company without making a public announcement of an open offer. Further, Regulation 4

of the Takeover Code states that irrespective of any acquisition of shares or voting rights,

if the acquirer directly or indirectly acquires control over a target company, then it must

make a public announcement of an open offer for the acquisition of shares from the

public shareholders. As per the Takeover Code, such open offer must be atleast for 26%

of the total shares of the target company calculated as of the tenth date from the closure

of the tendering period and after factoring all potential increases contemplated during the

offer period.

• CCI Approval:- The prime function of the Competition Commission of India are the

following,

Make the markets work for the benefit and welfare of consumers.

Ensure fair and healthy competition in economic activities in the country for

faster and inclusive growth and development of economy.

Implement competition policies with an aim to effectuate the most efficient

utilization of economic resources.

Develop and nurture effective relations and interactions with sectoral regulators to

ensure smooth alignment of sectoral regulatory laws in tandem with the

competition law.

Effectively carry out competition advocacy and spread the information on benefits

of competition among all stakeholders to establish and nurture competition culture

in Indian economy.

Since TATA has an experience in cross border M&A during the TATA-Corus deal, it did not

face any legal barriers. The SEBI takeover code has been modifies to accommodate cross

border M&A which was earlier missing. Also, the TATA-JLR deal comes under the purview of

Foreign Exchange Management Act under the Capital Account transaction and hence needs

permissions from RBI for finances greater than the allowed limits and also repatriation of

income from JLR abroad.