The Competition Commission of India (CCI) plans to introduce a scheme of pre-merger consultation for companies considering mergers and acquisition. The consultation process, if put in place, will allow companies a chance to seek competition regulator’s views before they they file their proposals.
”We are considering having pre-merger consultations clause for vetting mergers under sections 5 and 6 of the Competition Act,” said CCI chairman Dhanendra Kumar at the Indo-US Economic Summit held in the capital. The provision of pre-merger consultations will allay fears of the corporates that the CCI’s approval process, which can be as long as 210 days, could delay strategic investments and M&As.
Introducing pre-merger consultations with companies will help reduce the time taken for approving such proposals. “It is reasonable to expect that most (M&A) cases will be cleared within 40 days,” said Mr Kumar.
Under the proposed ‘pre-merger’ provisions, companies mulling mergers and acquisitions would be allowed to approach the CCI to find out if their proposals comply with the Competition Act. However, the opinion will not be binding. The draft provisions would soon be placed on the CCI’s website inviting comments from the public, said Mr Kumar.
He said that the notification will be industry friendly and will create an enabling situation for cross-border mergers and acquisitions.
Globally, the concept of pre-merger consultations is widely followed. Such consultations will clarify doubts regarding the information to be provided that firms need to provide to the CCI while filing their formal notification. Officials say that the move to introduce the scheme of pre-merger consultation has been necessary from the point of view of information dissemination and competition advocacy.