The Competition Commission of India (CCI) has approved engineering and construction major Larsen & Toubro’s (L&T’s) proposal to acquire up to 66.15% stake in Mindtree.With this nod,L&T has overcome the first major regulatory hurdle in its bid for hostile takeover of the Mindtree.
A hostile takeover is the acquisition of one company (called the target company) by another (called the acquirer) that is accomplished by going directly to the company’s shareholders or fighting to replace management to get the acquisition approved.A hostile takeover can be accomplished through either a tender offer or a proxy fight.
Competition Commission of India is a statutory body of the Government of India established in 2003.It is responsible for enforcing Competition Act,2002 throughout India and to prevent activities that have an appreciable adverse effect on competition in India.
CCI consists of a Chairperson and 6 Members appointed by the Central Government.The Competition Act,2002 was amended in 2007.It follows the philosophy of modern competition laws.
The act prohibits (a)anti-competitive agreements (b)abuse of dominant position by enterprises and (c)regulates combinations (acquisition, acquiring of control and mergers and acquisitions) which causes or likely to cause an appreciable adverse effect on competition within India.