CCI gets power to approve big M&As

NEW DELHI: The Competition Commission of India will now be able to vet and approve big mergers and acquisitions in the country, with the government notifying the key provisions of the Competition Act on Friday.

The provisions, Sections 5 and 6, would grant the competition watchdog the powers to scrutinise amalgamation proposals of companies with a threshold of 1,500 crore. The CCI would take a maximum of 180 days to vet mergers.

Corporate affairs secretary DK Mittal, however, clarified that this would not cover mergers in the banking sector once the Banking Amendment Bill gets passed in Parliament. The Banking Amendment Bill, which proposes to keep banking sector M&As out of the purview of the Competition Commission of India (CCI), was passed by the cabinet on Thursday and will be placed before Parliament in this session.

CCI chairman Dhanendra Kumar told ET that the watchdog expects to clear all such M&A proposals as quickly as possible. "This would immensely help M&A activity in the country as there will be a legal certainty and ensure accelerated growth in the economy," he said.

Kumar said he expected only 40-50 such proposals as it would be looking at acquisitions with combined assets of 1,000 crore or more, or combined turnover of 3,000 crore or more.

Further, the target company's net assets have to be a minimum of 200 crore or turnover of 600 crore to attaract CCI's intervention.