CCI may opt pre-merger talks to reduce deal approval time
Press Trust of India / New Delhi Feb 16, 2010, 15:11 IST
Competition watchdog CCI today said it is looking at the possibility of introducing pre-merger consultations with companies to reduce the time taken for according mandatory approvals to mergers and acquisitions.
At present, the Commission can take up to 210 days to clear M&A deals.
"We are considering having pre-merger consultations clause for vetting mergers under Sections 5 and 6 of the Competition Act. It is reasonable to expect that most (M&A) cases will be cleared within 40 days," Competition Commission of India chairman Dhanendra Kumar said at the Indo-US Economic summit here.
Although the government has notified various sections of the Competition Act, it has not yet operationalised the Sections 5 and 6 of the Act that deal with mergers and acquisitions, mainly because of objections raised by the industry.
As per the Act, the Commission can take up to 210 days to approve mergers and acquisitions, which the industry feels is too long a period and does not go well with the current business environment where decisions are taken real time.
Under the proposed 'pre-merger' provisions, companies mulling mergers and acquisitions would be allowed to approach the Commission to find out the possibility of non-compliance with the Competition Act.
The draft provisions, Kumar added, would soon be placed on the CCI's website to invite consultations and comments from the public.
"Notifications to be issued will be industry friendly. It will also create an enabling ... Situation for cross-border mergers and acquisitions. The sections will provide industry a good forum for litigation," he added.
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