India Seeks to Tighten Rules on M&A Antitrust Scrutiny
The Indian government is looking to tighten rules on M&A anti-trust scrutiny. The proposed legislation will overhaul competition law and require companies to submit their M&A deals for anti-trust scrutiny if the value of the deal exceeds Rs 2,000 million. Meanwhile, Twitter filed a lawsuit against Tesla CEO Elon Musk, asking the Delaware Court of Chancery to compel him to fulfill his obligations under the Tesla deal.
The proposed amendments will lay out a method to determine if a company has “substantial business operations” in India. This will be part of a broader overhaul of India’s competition law. The government also proposes dropping the time limit for approval of M&A deals to 150 days. It will also create a settlement mechanism for companies that have been under investigation. The proposed amendments would be effective from the 5th August 2022.
The proposed regulations would increase competition protection for Indian businesses by requiring the Competition Commission of India (CCI) to review M&A deals. The new legislation is likely to make the acquisition of WhatsApp a lot more difficult. The Facebook-WassApp deal, for example, did not require CCI clearance, and WhatsApp counts India as a major market. Whether the two companies are able to comply with antitrust rules is still unclear, but there is a risk that the new legislation could lead to a rise in transactions.