Wait for regulatory approval from CCI over Mindtree takeover, say legal experts

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26 Aug, 2025 12:21

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While the Mindtree-L&T saga is far from over, competition experts said that the Competition Commission of India (CCI) views on the takeover will set the precedent for corporate India.

After L&T bought VG Siddhartha’s 20.32 percent stake in Mindtree, it became the majority stakeholder in the company. The construction major also intends to further increase its share by 66.32 percent through an open offer of 31 percent and 15 percent through on-market purchases.

But the buyout is subject to regulatory approval from India’s anti-competition watch dog.  Ganesh Prasad, Khaitan & Co, said that from the share purchase agreement to the announcement of open offer, L&T could not carry out such transactions as they are all connected.

Aditya Bhattacharya, Joint Partner, Lakshmikumaran & Sridharan, said, “Under the present competition regime any acquisition of one enterprise by another, fulfilling prescribed thresholds, needs to be reported to CCI and its prior approval is a must.”

“It is a question of logic, if L&T acquires Mindtree, it will use Mindtree’s skill set not only to make its existing verticals stronger but it will also use the latter’s capability to acquire greater share in the ‘IT-enabled service sector’. Thus, CCI will have to scrutinise the transaction and certify that the transaction is not anti-competitive.”

“A ‘hostile takeover’ is a new phenomenon to India; the CCI’s scrutiny of the entire issue and it’s consequent decision will act as a very important precedence for similar future transactions. In fact, SEBI’s and CCI’s approach to this exercise (two of corporate India's largest regulators ) will be closely seen by world at large,” he added.

Termed as India’s first hostile takeover, the move was condemned by the founders including Rostow Ravanan, Subroto Bagchi and KK Natarajan. The company has been looking for investors and has not been successful so far.