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Coforge Gets Approval to Buy Majority Stake in Cigniti Technologies

Coforge has received regulatory approval from the US FTC and Indian CCI to acquire up to 54% of Cigniti Technologies' shares, advancing its acquisition plans.

by Damodharan N

Updated Jul 03, 2024

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Coforge Gets Approval to Buy Majority Stake in Cigniti Technologies

Coforge Limited has successfully completed the final regulatory step required to proceed with its planned acquisition of a majority stake in Cigniti Technologies Limited. This milestone marks a significant progression in the transaction process, allowing Coforge to move forward with acquiring up to 54% of Cigniti Technologies’ equity.

Hart-Scott-Rodino Antitrust Improvements Act Compliance

The clearance pertains to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, a U.S. federal law that mandates companies to file notifications and observe a waiting period before completing certain large transactions.

This act is designed to allow regulatory authorities to review and address any potential antitrust concerns related to mergers and acquisitions.

Coforge filed the required notification with the U.S. Federal Trade Commission (FTC) and the Department of Justice (DOJ) under this act. The completion of the waiting period confirms that no objections or further investigations were initiated, clearing the path for the transaction.

With this regulatory hurdle overcome, Coforge is now set to proceed with the acquisition process. The key steps remaining include:

  • Execution of Share Purchase Agreements: Coforge will finalize agreements with the promoters and selected public shareholders of Cigniti Technologies, securing the terms for purchasing up to 54% of the company’s shares.
  • Mandatory Open Offer: In compliance with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, Coforge will initiate a mandatory open offer to acquire additional shares from Cigniti's existing shareholders. This step ensures that all shareholders have the opportunity to sell their shares to Coforge at a specified price, facilitating a smooth transition of ownership.

Read the Release About the Hart-Scott-Rodino Antitrust Improvements Act Compliance Here 

CCI Approval

 On June 25, 2024, the Competition Commission of India (CCI) approved Coforge Limited's plan to acquire a significant stake in Cigniti Technologies Limited. The approval allows Coforge to purchase between 50.21% and 54% of Cigniti's shares. This decision follows the requirements set by the Securities and Exchange Board of India (SEBI) for such transactions. Coforge, listed on the NSE and BSE, specializes in IT and IT-enabled services, while Cigniti, also listed on these exchanges, is involved in similar IT services.

Read the Press Release Here  

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Hart-Scott-Rodino Antitrust Improvements Act 1976 

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 is a law that helps control mergers and business deals to make sure they don't harm competition. Here's what it does:

  • Notification Requirement: Companies need to tell the Federal Trade Commission (FTC) and the Department of Justice (DOJ) about certain big deals before they can go ahead.
  • Waiting Time: After the companies file their paperwork, there is a waiting period during which they can't complete the deal. This gives the FTC and DOJ time to check if the deal might hurt competition.
  • Extra Information: If the FTC or DOJ need more details to decide if the deal is fair, they can extend the waiting period until they get the information they need.
  • Filing Fee: Companies have to pay a fee when they file their paperwork. This fee is shared between the FTC and DOJ and depends on how big the deal is. The fee amount changes every year based on economic factors.

 Know more about the act Here 

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Cigniti Technologies Limited 

Cigniti Technologies Limited is a company that helps businesses become digital-first by providing a range of services for digital transformation. They offer end-to-end solutions in Digital Assurance and Digital Engineering, which include quality testing, AI-driven automation, and technology advisory.

Cigniti works with various industries like banking, healthcare, retail, and travel to ensure their digital systems are secure, efficient, and effective. They use their own advanced tools, such as BlueSwan for testing and Zastra for data curation, to support businesses in improving their digital operations and achieving their growth goals.

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Coforge Limited  

Coforge Limited is a global company that offers digital services and solutions to help businesses grow using the latest technologies. They specialize in a few key industries and have a deep understanding of these areas.

By partnering with top technology platforms and focusing on product engineering, Coforge helps transform businesses with tools for cloud computing, data management, integration, and automation.

They have operations in 21 countries with 26 delivery centers in nine of those countries, using their own platforms to enhance important business processes.

Coforge Gets Approval to Buy Majority Stake in Cigniti Technologies - FAQs

1. What is Coforge planning to do with Cigniti Technologies?

Coforge is acquiring up to 54% of Cigniti Technologies.

2. What approval did Coforge recently receive?

Coforge received approval from the U.S. FTC and DOJ under the Hart-Scott-Rodino Act to proceed with the acquisition.

3. What is the Hart-Scott-Rodino Antitrust Improvements Act?

It’s a U.S. law requiring companies to notify regulators about large mergers and wait for approval to prevent anti-competitive outcomes.

4. What is the next step for Coforge after regulatory approval?

Coforge will finalize share purchase agreements and start a mandatory open offer to buy additional shares from Cigniti’s shareholders.

5. When did the Competition Commission of India (CCI) approve the acquisition?

The CCI approved it on June 25, 2024.

6. What does Cigniti Technologies do?

Cigniti provides digital transformation services, including quality testing and AI-driven automation.

7. What is Coforge’s main focus in its services?

Coforge focuses on cloud computing, data management, integration, and automation.

8. How many countries does Coforge operate in?

Coforge operates in 21 countries.

9. What is BlueSwan?

BlueSwan is Cigniti’s AI-powered testing platform.

10. What industries does Coforge specialize in?

Coforge specializes in key industries with deep domain knowledge and technology partnerships.

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