As the global economy continues to show signs of improvement, more countries—including the UK, India, and Brazil—are moving toward rules that require approval of transactions prior to closing—even when neither of the parties to the transaction is domestic. The news is not all bad; some countries, such as India, Spain, and Turkey, have adopted de minimis standards that exempt transactions with minimal local impact. Brazil is also considering a de minimis test.
Under the recently enacted Indian Merger Control Regulation, transactions meeting certain thresholds that are signed or approved by a company’s board of directors on or after June 1, 2011 will trigger a reporting requirement. The Indian rules incorporate a complex web of thresholds with a mix of Indian and worldwide assets or revenues for the acquiring group and for individual parties. After discussion with leading local counsel in India, however, we have determined that, until 2016, parties will not have to report deals where the target has (i) assets in India of less than approximately US$55 million or (ii) Indian sales of less than approximately US$165 million.
If the de minimis rules do not apply, the parties may not be allowed to close for as long as 210 calendar days. However, India’s Competition Commission has indicated that it expects parties will be able to close transactions that do not raise antitrust issues 30 calendar days after filing.
The filing fee is approximately US$22,000, but when the parties are not competitors, they may file a short-form notification with filing fees of approximately US$1,100.
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