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M&A Developments and Relevant Regulatory Updates
The first half of the current financial year has been eventful to say the least. As we exit the first half, global headwinds as well as domestic influences, which were 'felt' in a rather benign sense as we started this fiscal, look much more real and pronounced. The impact can be seen in market trends, deal making (refer section M&A and PE review- Summary) and corporate performance. Taxand India discusses developments from a tax and regulatory perspective which could have significant impact on M&A activity going forward.
Rules for scrutiny and approval of M&A transactions by the Competition Commission of India were announced, and no controversial scrutiny has been witnessed to date. The high profile 'Vodafone case', which has the potential of radically transforming the way tax incidents (costs and risks) are assessed in cross border M&A (and any structuring proposition in general), is now being litigated at the Supreme Court, with both sides presenting forceful arguments. In addition, there have been progressive changes effected in corporate laws, ICDR norms, ECB policy and FDI norms, which could be looked at as having a positive influence on M&A and financing, by simplifying procedures and compliances.
While India has witnessed a rather dynamic first half, and are on the verge of a tipping point in terms of momentum of M&A activity, and its regulation, we could expect to be back on track as domestic inflation, interest rate (and political) environment improves.
Access the full Round up of M&A developments and relevant regulatory updates for April - September 2011 (PDF)
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