Overhaul of Indian Takeover Rules Likely to Drive up M&A Costs
Thursday, July 22, 2010 16:56The purchase of controlling stakes in companies in India will become more expensive and acquisition rules that are being proposed by regulators.
According to the India’s takeover panel, it is said that the investors who want to buy more than 25% in a company would be forced under the proposed rules to make a mandatory bid for all remaining shares in the target.
It means that a buyer who wants to acquire only a 26% stake in a group runs the risk of buying 100% of the target company, making the takeover more expensive. Under the current rules, the buyers will be obliged to make a mandatory offer for an extra 20% stake if they want to acquire more than 15% in a company.
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