Monday, April 18, 2011
Posted by D. Daniel Sokol
Simon Baxter & Nikolaos Peristerakis (both Skadden, Arps) discuss The New Indian Merger Control: Key Procedural Issues.
ABSTRACT: On March 4, 2010, the Ministry of Corporate Affairs of India published a Notification according to which the merger-related Sections 5 and 6 of the Competition Act, 2002 (as amended) (the "Act") will enter into force as of June 1, 2011. The merger control regime will be supplemented by procedural guidance (the "Draft Regulations") that is expected to enter into effect prior to June 1.
The entry into effect of the new Indian merger control regime is a long awaited development, not only because it took several years for the merger related provisions of the Act to enter into force, but also because India was the last BRIC country without a merger control regime applicable to cross-border mergers and acquisitions. The delay was due to both a challenge of the Act before India's Supreme Court and subsequent amendments by the Parliament of India that led to two important modifications in the merger control regime as originally anticipated by the Act: (i) modification of the regime from a voluntary to a mandatory notification with a bar on closing; and (ii) extension of the maximum waiting period from 90 days to 210 days.
These modifications, combined with very expansive notification thresholds, will raise a number of important procedural issues for cross-border transactions.