SEBI Revamps M&A Rules: Protects Retail Investors, Speeds Up Deals

• SEBI plans significant amendments to its merger and acquisition (M&A) rules, known as the "takeover code," to safeguard retail investors and accelerate deal closures.
• New rules will prohibit acquirers from offering higher prices or additional compensation to major shareholders for six months post-open offer, aiming to level the playing field.
• The regulator intends to shorten the open offer completion period from two months to 30 days and introduce mandatory external valuations for private share sales by large shareholders.
• SEBI is also reviewing "creeping acquisition" norms, which currently allow existing investors to increase stakes by up to 5% annually without triggering a mandatory open offer.
• The reforms address past instances of preferential deals for large shareholders, like the Adani Group's acquisition of New Delhi TV Ltd, and align with global stricter thresholds.

Why It Matters: SEBI's M&A rule overhaul aims to protect small investors, ensure fair deals, and streamline acquisition processes.