Merger rules by month-end: CCI
April 18: The new regulations on mergers and acquisitions (M&As) for the companies would be final-ised by the end of April, said the chairperson of the Competition Commission of India (CCI), Mr Dharendra Kumar.
From June 1 onwards, all large companies would need to seek the approval of the CCI before going ahead with a merger or an acquisition. The CCI has been empowered to do so with the notification of sections 5 and 6 of the Competition Act, 2002
However, the industry is concerned that it could raise problems in the merger process as mishandling of merger provisions could lead to regulatory and procedural hurdles and the companies will have to pay high fees for seeking CCI approval. There is also fear that the rival companies may delay mergers by claiming that it will be anti-competitive. The industry is concerned that companies would need to approach the CCI even for small transactions like bonus share transfers.
According to provisions of the Act, companies with a turnover of over Rs 1,500 crore will have to approach the CCI for approval before merging with another firm. Mr Kumar said that the commission has received a number of comments, suggestions and representations on the draft regulations from India and overseas. “We are analysing them and will take a view on all these suggestions and inputs before we finalise the regulations,” he said.
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