India wants to join the global M&A table – TBEN

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India has emerged as a key overseas market for several global tech giants over the past decade as Meta, Google and Amazon raced aggressively to find the next and arguably the last major growth region. Now, the South Asian nation is looking to leverage its vast reach to influence M&A deals abroad.

New Delhi has proposed amendments to its Competition Act of 2002 to make a number of changes, including requiring the approval of the local watchdog (Competition Commission of India) for all overseas deals worth more than $252 million for companies with “substantial business activities in India”.

India, the world’s second-largest internet market that has attracted tens of billions of dollars of investment from Meta, Google and Amazon and venture capitalists including SoftBank, Sequoia and Tiger Global, has traditionally scrutinized deals based on asset size, not the transaction value. According to law firm Shardul Amarchand Mangaldas, the Indian regulator approved more than 700 fillings in the past decade alone.

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But things seem to be shifting, trying to align India’s position with that of China, the US and Europe.

“Indian markets have grown significantly over the past decade and there has been a paradigm shift in the way companies operate. In view of the economic development, the emergence of different business models and the experience gained in the functioning of the Commission, the Government of India has established the Competition Law Review Commission to examine the amendments to the said law and proposed,” said the bill, which was published Friday. afternoon said.

The Competition Act (Amendment Act), 2022, has proposed the following amendments:

(a) changes to certain definitions such as “enterprise”, “relevant product market”, “Group”, “Control”, etc., to provide clarity;
(b) broadening the scope of anti-competitive agreements and including a party that facilitates an anti-competitive horizontal agreement under such agreements;
(c) provisions for reducing the time limit for the approval of combinations from two hundred and ten days to one hundred and fifty days and for the formation of a prima facie opinion by the Commission within twenty days for early approval of combinations;
(d) “value of the transaction” provisions as another criterion for reporting combinations to the Commission;
(e) three-year limitation period for submitting information about anti-competitive agreements and abuse of a dominant position to the Commission;
(f) appointment of the Director-General by the Commission with the prior approval of the Central Government;
(g) introducing a settlement and commitment framework to reduce disputes;
(h) encouraging parties in an ongoing cartel investigation in the form of a lesser penalty to disclose information about other cartels;
(i) replacement of any provision providing for a penalty of up to rupees one crore or imprisonment for up to three years or both in the event of a violation of a National Company Law Appellate Body Order by a contempt provision;
j) issuing guidelines, including sanctions to be imposed by the Commission.

The move comes at a time when bankers in India are brokering a record number of mergers and acquisitions, even as transaction activity elsewhere slows. According to Bloomberg, in the quarter ending June, India saw deals worth more than $82 billion completed or sought approval. The deal flow in India is expected to grow further.

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“India is a super-important market for sovereign wealth, private equity and global pension funds, which are playing an increasingly important role in the number of mergers and acquisitions currently underway,” said Kaustubh Kulkarni, India’s head of investment banking for JP Morgan. and Southeast Asia, in a recent TV interview.

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