india: India seeks wider authority over global M&A with antitrust law

India plans to review its competition law so that global tech companies will have to seek the country’s antitrust approval for many overseas mergers and acquisitions, an ambitious move by Prime Minister Narendra Modi’s government to gain the kind of influence over big tech that Europe and China want. to have .

All deals with a transaction value of more than 20 billion rupees ($252 million) require approval from the Indian antitrust regulator if the companies have “substantial business activities in India,” according to a draft bill seen by Bloomberg News. The bill could be submitted to parliament as early as Friday, according to an expert who confirmed the contents of the document.

The government will introduce rules defining “substantial business activities” once the changes are approved, the person added, asking not to be identified while discussing private information. A spokesman for the Ministry of Business Affairs did not respond to calls for comment.

India’s current antitrust rules allow the regulator to examine deals based on the asset size and turnover of the companies involved, but the amended law will for the first time allow the Competition Commission to examine transactions based on their value.

The proposals stem from India’s view that it should have a say in deals such as Meta Platforms Inc’s acquisition of WhatsApp. in 2014, given the large Indian user base of the messaging app. With 834 million internet users and the digital consumer economy projected to become an $800 billion market by 2030, Modi’s government has been working on regulations to tighten oversight.

In recent years, China has increasingly exercised its power over foreign company mergers. In 2018, Qualcomm Inc. a $44 billion bid for rival chipmaker NXP Semiconductors NV after Chinese regulators failed to approve what would have been the biggest deal ever in the chip industry.

Competition law in countries like Germany and Austria also follows the deal value threshold for mergers in the digital space. Germany has amended Germany’s anti-competitive law to prescribe a transaction threshold of 400 million euros ($407 million) for merger notification, while Austria has mandated 200 million euros ($204 million) for the same.

India’s definition of the value of a transaction includes “any valuable consideration, direct or indirect, or deferred to an acquisition, merger or merger,” according to the draft bill.

The government is also aiming to shorten the merger approval deadline to 150 days from the existing 210 days to speed up the approval process, according to the draft bill.

Leave a Comment

Your email address will not be published.