With large M&A deals set to come under its lens soon, Competition Commission of India (CCI) said on Wednesday it will ensure that norms are not used by rival firms to block or delay ‘pro-competitive' mergers and acquisitions in the industry.
“It is important for CCI to ensure that competitors are not ‘gaming the system' by claiming that a merger of their competitors is anti-competitive when, in fact, it is pro-competitive and will produce a more efficient player in the market, possibly putting downward pressure on prices,” the CCI Chairman, Mr Dhanendra Kumar, said. He was addressing an Assocham conference on ‘value creation through mergers and acquisitions'.
Last month, the Government notified M&A norms under the Competition Act, specifying that after June 1, 2011, transactions that meet the stipulated criteria will have to compulsorily obtain the CCI nod.
“It can also happen that if a competitor wishes to block a merger, he can file an application…Our job is to see through it and to ensure that pro-competitive mergers are not blocked,” Mr Kumar said.
Seeking to allay industry's apprehensions over possible delays in granting M&A approval, he pointed out that CCI nod could be sought concurrently even as companies approach other agencies for mandatory clearances. “M&A deals need clearances from SEBI and CLB and other bodies…and there is no reason why these things cannot proceed concurrently. We will ensure that there is no delay (from our side),” he said.
The CCI Chairman said the recently notified provisions will give a legal certainty and predictability with regard to M&A deals. “We will act as an accelerator and not as a brake,” he said, adding that the commission was also building up “capacity” to undertake speedy approvals.
“We are recruiting professionals, economists and lawyers and have undertaken intensive training of people. We are calling experts from the Federal Trade Commission for training on live cases,” Mr Kumar added.
Speaking to reporters later on the sidelines of the conference, Mr Kumar, however, refused to comment on the $8.4-billion Cairn-Vedanta deal.