Corporates should seek US Anti-Trust approval for M

New Delhi, Mar 28 (UNI) Indian Corporates eyeing over 50 million dollars mergers and aquisitions in the United States should secure approval from the US Anti-Trust Department, to avoid getting entangled in legal battles,according to Assocham.

The chamber advised such corporates, who intend to hold a part of ownership in American companies through formation of joint ventures and any other route, to subject their transactions through the US Anti-Trust laws in advance, before paying off their commercial costs.

It added this is necessary to sustain such deals as the US Anti-Trust Department takes serious note of such mergers and acquisitions after they are concluded.

''Whenever companies plan fairly large acquisitions in the US, they should notify the US anti-Trust Authority to obtain advance clearance from the US federal anti-trust authority,'' Assocham said in a statement on 'Doing Business with US : Trends&Legal Risks.' It added that takeover worth up to 50 million dollars of US companies are exempt from pre-notification to Anti-Trust authority of the US, but any takeover over 50 million dollars is subjected to pre-qualification of American anti-Trust authority.

It also clarified that prior sanction from the US Federal anti-trust authority is also required even for the American companies which intend to takeover overseas companies.

The industry body cautioned that violation of the rules laid down by anti-Trust authority of US Federal system results into heavy penalties and the planned mergers could also be declared null and void.

The domestic corporates are advised to hire legal consultancy so that smooth sailing takes place in any sort of takeover and even buying for ownership of American corporates, the business chamber said.

The Assocham statement further stated that when a company is acquired through the purchase of its stock, the parties to the acquisition agreement are the buyer and the selling shareholders.

UNI