The CCI’s wider merger net draws deal value into focus

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₹2,000 crore. Interestingly, ‘deal value’ would also include the value of any investment in the target by any acquirer group entity in the last two years. The need to introduce new-age merger thresholds (alongside more traditional turnover-based thresholds) assumed significance after Facebook’s acquisition of WhatsApp escaped antitrust scrutiny despite its deal value being $19 billion.

WhatsApp did not meet the requisite turnover/asset levels as it was a free app and its balance sheet did not reflect the true value of its prodigious data bank. Since then, several countries have introduced DVTs to plug leakages of major strategic mergers and acquisitions (M&As), especially involving startups and tech mavericks with low sales or assets. Critics of a DVT have been airing their concerns that any such test may bring too many no-issue foreign deals under scrutiny.

However, the experience from Germany and Austria (DVT front-runners in Europe) helps alleviate some concerns. Although the German competition authority initially received many queries on whether deals should be notified based on a DVT, there were only a few deals that required a filing. Along with tech deals, some deals were from the pharma sector; these were valued highly based on the market potential of their R&D pipeline of products in advanced clinical trials.