CCI to vet brownfield pharma M&A deals
So, a multinational company with an intent to acquire a domestic drug firm would take a commitment at the outset that it would not cut production of essential drugs and R&D spend in the target company in years following the acquisition. The Competition Act will be amended for this purpose.
This follows a legal opinion obtained by the Prime Minister’s Office (PMO) to validate the point that CCI’s mandate can be extended to deal with ‘public interest issues’.
Currently, the CCI mandate on M&A deals is in recognition of the appreciable adverse impact they can have on the relevant market. Asset/turnover thresholds are prescribed in the Act for this purpose.
At present, the foreign investment promotion board (FIPB) is vetting brownfield pharma deals. An inter-ministerial group had earlier defined the regulatory regime for pharma FDI.
Accordingly, officials in the ministry of corporate affairs are in the final stages of drafting changes in the Competition Act Amendment Bill to enable CCI to take charge of pharma M&A deals in the country. This amendment to the Competition Act is likely to be
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