December 7, 2022

India has emerged as a major offshore market for many global tech giants in the past decade as Meta, Google, and Amazon race hard to find the next and possibly last geography. Now the South Asian country is looking to leverage its vast reach to influence M&A deals overseas.

New Delhi proposed amendments to the Competition Act 2002 on Friday to introduce a number of changes including requiring permission from the local watchdog (Competition Commission of India) for all offshore deals in excess of $252 million for companies with “significant business operations in India”.

India, the world’s second largest internet market that has attracted tens of billions of dollars in investment from Meta, Google, Amazon and venture capitalists including SoftBank, Sequoia and Tiger Global, has traditionally screened deals based on asset size rather than deal value. According to law firm Shardul Amarchand Mangaldas, the Indian regulator has approved more than 700 fillings in the past decade alone.

But it seems that things are taking a turn and trying to achieve parity between the position of India and that of China, the United States and Europe.

“There has been significant growth in the Indian markets and a paradigm shift in the way companies operate in the last decade. In view of the economic development, emergence of different business models and experience gained from the work of the commission, the Government of India has set up the Competition Act Review Committee, to examine and propose amendments in the said Act,” The bill was published on Friday afternoon He said.

The Competition (Amendment) Bill 2022 proposed the following changes:

(a) changes to certain definitions such as “company,” “market related products,” “group,” “control,” etc., to provide clarity;
(b) broadening the scope of anti-competitive agreements and including a party facilitating a horizontal anti-competitive agreement under such agreements;
(c) provisions to reduce the time limit for approval of combinations from two hundred and ten days to one hundred and fifty days and to form a preliminary opinion by the committee within twenty days for express approval of the combinations;
(d) “Deal value” provisions as another criterion for notification of combinations to the Committee.
(e) A three-year limitation period for the submission of information on anti-competitive agreements and abuse of dominant position before the Commission;
(f) The appointment of the Director General by the Commission with the prior approval of the Central Government.
(g) Introducing a settlement and obligation framework to reduce litigation;
(h) incentivizing the parties in an ongoing cartel investigation with regard to a lighter penalty for disclosing information about other cartels;
(i) replace a provision providing for a penalty of up to Rs. crore or imprisonment for up to three years or both in case of contravention of any order of the Court of Appeal of the National Companies Act with provisions for contempt;
(j) Issuing guidelines, including on sanctions to be imposed by the Commission.

The move comes at a time when bankers in India are brokering a record number of mergers and acquisitions even as deal activity elsewhere has slowed. India saw deals worth more than $82 billion or seeking approval in the quarter ending in June, according to Bloomberg. Deal flow in India is expected to grow further.

Kaustop Kulkarni, India’s head of investment banking at JP Morgan and Southeast Asia, said in a recent TV interview.

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