Hostile Takeovers Made Easier: The Implications of CCI’s Relaxed Acquisition Rules
The recent relaxation of merger and acquisition rules by the Competition Commission of India (CCI) raises critical questions about corporate governance and market fairness. By allowing companies to acquire up to 25% of another firm's shares without prior consent or notification, the CCI has effectively paved the way for hostile takeovers. This shift significantly changes the corporate landscape, making it easier for large corporations to exert control over smaller or unwilling entities. Historically, even minor acquisitions required CCI’s approval, ensuring that market players acted transparently and competitively. The new rules, however, could promote aggressive acquisitions that undermine a company’s independence and shareholder interests. While companies are still restricted from actions that change ownership and control outright, the ability to accumulate significant stakes without notice is a powerful tool. The shift could fuel a wave of acquisitions aimed at consolidating po...