20/08/2022 - Government Policies

KEY POINTS

·        Among several proposed changes, one of the most significant is the introduction of an additional “deal value” criterion for assessing whether a transaction (M&A) requires mandatory approval from the CCI.

·        Under the existing rules, the M&A will require a CCI approval if it crosses specified asset or turnover thresholds.

·        The case that has regularly been cited to demonstrate the need for DVT is Facebook/Whatsapp.

·        Despite a purchase price of c.$19 billion, the acquisition of WhatsApp by Facebook availed benefit of de minimis exemption in India.

·        Expediting the merger review timelines is a major focus of the Bill. The prima facie review of 30 working days has been curtailed to 20 working days.

·        For a notifiable transaction, the parties are not permitted to acquire any shares prior to receiving CCI approval i.e., standstill obligation.

·        This has created hurdles for open-market purchases or stock-market acquisitions where time is the essence, and without any prior disclosures to the public.

·        Under the existing framework, the cartel agreement between competitors (i.e., engaged in similar trade) is presumed to have an appreciable adverse effect on competition in India.

·        The changes introduced are revolutionary, visionary, and innovative; however, much depends on its successful implementation. 

Kindly review 

Kindly review

Kindly review