Competition Commission of India eases reporting requirements in M&As

NEW DELHI: In a bid to make the M&A process smoother for India Inc, the competition regulator has relaxed the reporting requirements when companies strike a deal.

Only deals in which 25% equity or voting rights is acquired will need to be reported to the commission, an official in know of the new rules said.

Under the current merger regulations, M&A and private equity transactions, where greater-than-15% equity or voting shares are acquired, are subject to a pre-merger notification under which a company needs to send a notice to the Competition Commission of India declaring the same.

" The M&A culture in the country is very dynamic and we need the law to move along with it. We have decided to ease the norms to facilitate this investment option," a top official told ET. The notifications are expected to be made public by this week, he added.

This will help quicken the pace of M&A deals in the country as the formal review and approval processes usually takes a lot of time .

Further, the commission will also do away with notifications altogether in matters relating to intra-group mergers and acquisitions.

"In case of intra group amalgamations where the companies are wholly-owned group companies, no intimation is required from the companies anymore," the official said. The competition commission has the freedom to change the rules under the Competition Act without pushing for amendments in the Act.

According to competition experts, the notifications will reduce compliance burden of the corporate sector by a great deal and are a step in the right direction.