A spanner thrown into the works of the Jet-Etihad deal could have wide repercussions for M&A in India. Avirup Bose explains
The merger control provisions in India’s Competition Act, 2002, came into effect on 1 June 2011. Under section 5 and 6 of the act, all acquisitions of shares, assets or control over the affairs of an enterprise, where certain asset and turnover thresholds prescribed under the act are met, require approval from the Competition Commission of India (CCI) before they can be implemented.
Corporate India has lauded the CCI, the nodal agency implementing the provisions of the act, for being commendably swift in granting approvals, allaying concerns about timing and the adverse impact that the clearance process might have on M&A activity in India. By the end of 2013, the CCI had received 147 notifications of combinations (acquisitions of shares, voting rights and control, and mergers and amalgamations) and had passed orders approving 140 transactions. Each of these 140 transactions was approved by the CCI within a period of 30 days, excluding the time taken by the parties to respond to queries or offer modifications.
Given the track record of bureaucratic hurdles of Indian regulators, this is a commendable achievement. However, recent developments in the area of Indian merger control law could signal worrying times ahead.
Avirup Bose is an expert in competition law with the Competition Commission of India. He is qualified to practise law in India and New York. This article reflects his personal views.