Merger Control & Investors
By: Prashant Kapoor, Director, M&A Tax, KPMG
By: Prashant Kapoor, Director, M&A Tax, KPMG
Competition Commission of India (CCI) notified its final combination regulations which provided much needed respite to financial investors. Acquisitions of shares or voting rights for investment purposes have been kept out of ambit of scrutiny but this not a blanket exemption. The Act in its present form provided a restrictive exemption for acquisitions by public financial institutions, foreign institutional investors, banks or venture capital funds only if such acquisition is pursuant to any covenant of a loan or investment agreement. Taking into consideration the proposals and recommendations made by various stakeholders, CCI exempted certain transactions of routine nature while releasing the final regulations. This is a welcome step for Private Equity Funds or Venture Capital Funds or other form of investments made where the acquisition of shares or voting rights are solely made for investment purposes or in the ordinary course of business if the post acquisition direct or indirect stake of the acquirer does not exceed 15%. The situation is different where the acquisition of shares or voting rights results in acquisition of control where the exemption is not available and the pre-notification requirement to CCI would be applicable if assets or turnover thresholds are breached. Further, the definition of control in the Competition Act, 2002 (
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