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Buyout rules to be in place

Mumbai, March 16: The civil aviation ministry is in the process of putting in place a series of guidelines to regulate mergers and acquisitions in the country's booming aviation sector.

Speaking to reporters in Mumbai after the Nationalist Congress Party nominated him for a second term in the Rajya Sabha, civil aviation minister Praful Patel said: 'We are forming the guidelines for mergers and acquisitions and this will be finalised soon. This would be followed by a comprehensive policy on civil aviation.'

The decision, the minister said, was taken in the wake of the controversy generated by the Jet Airways-Air Sahara deal.

Several domestic carriers, led by Vijay Mallya's Kingfisher Airlines, had alleged that the merger of Jet and Sahara would give Jet a monopoly over a few domestic routes and the use of parking space. The Jet Airways conglomerate now commands 50 per cent of the market share.

The Monopolies and Restrictive Trade Practices Commission (MRTPC) has asked Jet Airways to clarify whether the $500-million deal with Sahara would lead to any kind of monopoly. The commission is expected to come out with a report next month.

Although Patel refused to give any definite deadlines for bringing in the M&A guidelines in the aviation sector, sources said if all went well, the guidelines would be in place within the next couple of months.

However, he refused to set a timeframe for announcing the guidelines and the policy.

'We are examining various modalites to formalise the guidelines, and will consider all international best practices of M&As before finalising the policy,' he said in reply to a question on infrastructure allocations to airlines in the wake of the proposed merger of Jet and Sahara.

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