India: Merger Control

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Competition law in India is governed and regulated by the Competition Act 2002 (the Competition Act) and its underlying regulations. On 4 March 2011, the government of India issued notifications relating to, inter alia, bringing into effect from 1 June 2011 onwards the merger control regime in India and raising the asset and turnover thresholds provided in Section 5 of the Competition Act, and introduced certain exemptions. Additionally, on 11 May 2011, the Competition Commission of India (CCI) issued the Competition Commission of India (Procedure in regard to the transaction of business relating to combination) Regulations 2011 (Regulations). On 23 February 2012, just eight months into the merger control regime, the Regulations were amended through the Competition Commission of India (Procedure in regard to the transaction of business relating to combination) Amendment Regulations 2012 (Amendment Regulations) with a view to clarifying and addressing concerns and gaps which were identified in the first few months of the regime.

In the 18 months of enforcement, the CCI has reviewed approximately 95 merger notifications, all but one of which have been approved unconditionally. In this article, we discuss various practical aspects of merger control regime in India which have developed through the CCI’s jurisprudence.


Sections 5 and 6 of the Competition Act prohibit a ‘combination’ (an acquisition, merger or amalgamation) which causes or is likely to cause an ‘appreciable adverse effect on competition’ (AAEC) in the relevant market in India, and treat such combinations as void. Transactions that cross the jurisdictional thresholds (based on assets and turnover)1 specified in the Competition Act2 must be pre-notified to the CCI.

Importantly, the regime is suspensory and transactions subject to merger control review by the CCI cannot be concluded until merger clearance in India has been obtained or a review period of 210 calendar days has passed, whichever comes first.

Jurisdictional thresholds

The jurisdictional thresholds and targets3 have been prescribed in Section 5 of the Competition Act for parties and groups; these are set out in detail in the table below.

If the target enterprise either has assets or turnover in India below the stipulated thresholds, the transaction involving such a target would be exempt from the requirement of pre-approval from the CCI, irrespective of whether the other thresholds were met (the Target Exemption). However, it is important to bear in mind that the Target Exemption is available only in relation to transactions effected by way of an acquisition and not through mergers or amalgamations.

Currently, the stated thresholds apply equally to all sectors; however, in a recent development, the government of India introduced the Competition (Amendment) Bill 2012, which allows the government to prescribe differentiated thresholds for particular sectors.4 This tool is likely to be used to scrutinise a greater number of transactions, in particular sectors of national importance, such as pharmaceuticals, banking, telecommunications, etc.

Entities to be considered for calculation of thresholds

The thresholds prescribed under Section 5 of the Competition Act and the Target Exemption relate to various persons or enterprises, specifically:

  • the parties, being:
    • in case of an acquisition of an enterprise by acquisition of its assets, shares, voting rights or control under Section 5(a), the acquirer (including its subsidiaries, units, or divisions); and target enterprise (including its subsidiaries, units or divisions);
    • in case of an acquisition of control over an enterprise, where the acquirer already has direct or indirect control over an enterprise engaged in the production, distribution, trading or provision of similar or identical or substitutable goods or services – under Section 5(b), the target enterprise; and other enterprise(s) in the same or substitutable field over which the acquirer has direct or indirect control (including its subsidiaries, units, or divisions); and,
    • in case of a merger or amalgamation – under Section 5(c), the enterprise remaining after the merger; or the enterprise created as a result of the amalgamation; or
  • the group, being the group5 to which the target or resultant entity will belong post-acquisition or merger or amalgamation; and
  • the target, being the enterprise (including its subsidiaries, units, or divisions) whose shares, voting rights, assets or control are being acquired.

Other considerations to bear in mind include:

  • The CCI has interpreted ‘enterprise’ as referring to natural or legal persons and not unincorporated business divisions or units or stand-alone assets within such legal entity, even if they have an independent identity on the market.6 This assumes particular importance in the case of asset acquisitions, acquisitions of unincorporated businesses/units/divisions and hive-offs. The CCI in its decision practice7 has taken the view that, in relation to an acquisition of assets or an unincorporated business unit or division, for the purposes of the thresholds analysis (including application of the Target Exemption), the assets and turnover of the legal entity which houses the asset, business, unit or division which is being acquired, is to be considered. In effect, this means that where only assets are being sold, the CCI will not consider the value of those assets and the turnover arising from them, but the assets and turnover of the selling legal entity which houses the assets being sold, to determine if the transaction is notifiable.
  • Further, concerned with the fact that the enterprises may hive off assets into a step-down subsidiary to avail themselves of the Target Exemption, and thus avoid filing, the CCI through the Amendment Regulations has clarified that where the assets or a business/divisions are being hived off with a view to subsequently sell the same, the CCI will attribute the transferor parent entity’s assets and turnover to the step-down subsidiary when calculating the jurisdictional thresholds. This is particularly relevant in case of joint ventures (discussed below).
  • Also, in recent decisions, it appears that the CCI is viewing demergers and slump sales of assets or divisions undertaken through court-approved schemes of arrangement as mergers, rather than acquisitions, for the determination of the jurisdictional thresholds and trigger events. It appears that the mere fact that these transactions are undertaken by way of court process lends the CCI to treat them as mergers (whose trigger is a board resolution approving the final scheme of arrangement) and thereby remove the applicability of the Target Exemption and narrow the availability of the intra-group exemption (see below). This seems counterintuitive because, at its heart, a demerger and a slump sale are nothing but an acquisition of the assets or undertakings involved, where both the transferor and the transferee entities survive; they are not a merger, which has at its core the concept of extinguishment of an entity upon the completion of the merger.

Therefore, subject to the exceptions and exemptions explained below, a transaction qualifies as a combination that must be notified to the CCI, if either of the parties-based thresholds or the group-based thresholds, in addition to the target-based thresholds, are met. However, the thresholds need to be calculated carefully as the CCI will return notifications where the parties file even if the jurisdictional thresholds are not met.

Combinations not requiring prior notification

Under the Competition Act, acquisitions, share subscription or financing facilities entered into by public financial institutions, registered foreign institutional investors, banks or registered venture capital funds, pursuant to a covenant in a loan agreement or an investment agreement, do not need to be pre-notified to the CCI. However, in such cases, the acquirer will need to notify the CCI of the acquisition on Form III within seven calendar days after completion. There have only been three notifications filed with the CCI under this provision.8

‘Ordinarily exempt’ transactions

In order to prevent the merger control regime from becoming unduly onerous, following rounds of consultation prior to the introduction of the Regulations, the CCI introduced, in Schedule I, certain categories of transactions that are ‘ordinarily’ not likely to cause an AAEC in the relevant market in India and therefore do not normally require pre-notification to the CCI. Further, certain additional changes were introduced in the Schedule I by the Amendment Regulations. These categories are as follows:

  • Direct or indirect acquisitions entitling the acquirer to hold less than 25 per cent of the shares or voting rights of a target company (including through shareholders’ agreements), solely for investment purposes9 or in the ordinary course of business, not leading to control.10 (The word ‘entitle’ implies that options and convertible instruments would be notifiable. The decisions of the CCI, so far, do not provide much guidance on whether the grant of an option or a convertible instrument, or its exercise, or both, would require notification. Further, it is not clear whether in the absence of control-type rights, the appointment of an investor-director on the board of the target may be seen as being outside the ordinary course of business or not for investment purposes only.)11
  • Further acquisition of shares or voting rights by an acquirer who already holds 50 per cent or more of the shares or voting rights, except in the cases where the transaction results in a transfer from joint control to sole control.12 (Acquisitions by the remaining shareholder(s) from a shareholder exiting a joint venture may be caught outside this exemption. However, the CCI has interpreted ‘joint control’ widely (as discussed below)).
  • Acquisition of assets not directly related to the business of the acquirer or made solely as an investment or in the ordinary course of business, not leading to control of the target enterprise, except where the assets represent substantial business operations in a particular location or for a particular product or service of the target enterprise, irrespective of whether or not such assets are organised as a separate legal entity.
  • Intra-group reorganisations, including:
    • an acquisition of control or shares or voting rights or assets by one person or enterprise of another person or enterprise within the same group; and
    • intra-group mergers or amalgamations between a parent and a subsidiary that is wholly owned by enterprises belonging to the same group, or between subsidiaries that are wholly owned by enterprises belonging to the same group.

Nearly half of the notifications filed with the CCI have been intra-group reorganisations due to an artificial distinction between acquisitions and mergers, and amalgamations, adopted by the CCI through its decisional practice. In relation to the proposed combination relating to the amalgamation of Wyoming 1 Mauritius Private Limited (Wyoming) into Tata Chemicals Limited (TCL) (TCL/Wyoming – C-2011/12/12), the CCI held that since the transaction was taking place ‘pursuant to a scheme of amalgamation and not by way of an acquisition… the question of application of Item 8 to Schedule I of the Combination Regulations [the intra-group acquisition exemption] would not arise’.

  • Acquisitions of stock-in-trade, raw materials, stores and spares in the ordinary course of business.
  • Acquisition of shares or voting rights pursuant to a buy-back or a bonus issue or a stock split or consolidation of face value of shares or subscription to rights issue, not leading to an acquisition of control (care needs to be taken in case of a renunciation of rights).
  • Amended or renewed tender offer where a notice has been filed by the party making such an offer.
  • Acquisition of shares or voting rights by a person acting as a securities underwriter or a registered stockbroker (on behalf of its clients), in the ordinary course of its business and in the process of underwriting or stockbroking, as the case may be.
  • Acquisition of current assets in the ordinary course of business.
  • Transactions taking place outside India: a combination taking place entirely outside India with insignificant local nexus and effect on markets in India.

As a general matter, section 32 of the Competition Act empowers the CCI to inquire into combinations that take place outside India or where a party to a combination is outside India, if such combination has or is likely to have an AAEC in India. However, the Regulations have sought to provide this exemption for wholly offshore transactions. Having said that, practical experience suggests that this exemption is of extremely limited application.

In the TCL/Wyoming case, the CCI held that since the parties to the proposed combination met the thresholds relating to assets/turnover in India and one of the parties to the proposed combination was present in India, this exemption was not available. As a result, the exemption has been significantly whittled down by the CCI and it seems that only purely international transactions, where the parties or their groups do not meet the assets/turnover thresholds in India, would not require notification.

Further, as result of the test laid down in TCL/Wyoming, there have been other cases where transactions have been notified despite the target business not being present in India at all, nor any part of the transaction having taken place in India (Nestle SA/Pfizer Inc. – C-2012/05/57).

While these ordinarily exempt categories provided much-needed relief from the requirement to file transactions unlikely to cause an AAEC, it is important to remember that these are not absolute exemptions. If in the parties’ or the CCI’s assessment, the transaction is one which – despite qualifying under one of these categories – causes or is likely to cause an AAEC, then the parties would be expected to notify it. Accordingly, a qualitative competitive assessment may also be required to be made.

In addition, some exemptions above are intrinsically linked to and limited by the amorphous concept of ‘control’, which has only recently been given some shape through the CCI’s decisions.

Meaning of ‘control’

Until recently it could be said that India did not have a strict ‘change in control’-based test for qualifying transactions which are combinations and hence notifiable to the CCI. The term ‘control’ in section 5 of the Competition Act has been defined rather ambiguously (and circuitously) to include controlling the affairs or management of one or more enterprises or group, either jointly or singly. Given the lack of certainty in this definition of ‘control’, the CCI, in its recent decisional practice,13 has clarified that the ‘ability to exercise decisive influence over the management or affairs’ of another enterprise (including its division(s)), is tantamount to ‘control’ over such enterprise, whether such influence is being exercised by way of majority shareholding, veto rights (attached to minority shareholding) or contractual covenants.

While control must be ascertained on a case-by-case basis, it seems that the CCI is taking a conservative view, in that the ability to veto any strategic commercial operation, such as veto rights over the annual business plan, annual budget, annual operating plan, plans to enter new lines of business or locations, the appointment and compensation of senior management personnel, etc, with or without shareholding, could be considered enough to confer at least joint control. It is not yet clear from the CCI’s decisional practice how it would review the acquisition of a qualitative difference in control within the scope of their review.

Due to this expansive interpretation accorded to the meaning of ‘control’, the distinction between genuine minority protection rights and negative control has become blurred. As a result, many pure financial investment and private equity transactions involving acquisitions of entitlements to less than 25 per cent shareholdings in companies may now become susceptible to review by the CCI.

Treatment of joint ventures

The formation of a joint venture is not specifically covered by section 5 of the Competition Act, as it only covers the acquisition of an ‘enterprise’, mergers and amalgamations. As the definition of ‘enterprise’ under the Competition Act is in the manner of a going concern which is or has undertaken business, a purely ‘greenfield’ joint venture is unlikely to be considered as an ‘enterprise’; thus it does not fall within section 5 either. Moreover, in a majority of cases, purely ‘greenfield’ joint ventures are unlikely to meet the thresholds under the Target Exemption.

By contrast, to the extent that the jurisdictional thresholds are met, the establishment of a ‘brownfield’ joint venture (ie, where parents are contributing their existing assets or businesses to the joint venture) would be notifiable, as it would relate to the acquisition of an enterprise under section 5 of the Competition Act. Further, after the Amendment Regulations, as discussed above, while calculating thresholds in relation to such a joint venture, the assets and turnover of the parents are also likely to be considered.

Currently, there is no clear guidance from the CCI in relation to treatment of joint ventures or the attributes it would consider in determining if a transaction is greenfield or brownfield; or, for that matter, whether it would treat full-function joint ventures differently to non-full-function joint ventures.

Interlinked transactions

The CCI has held in the Vedanta restructuring case (C/2012/03/45) that where a proposed combination comprises series of interlinked and/or interdependent transactions, some of which may be ordinarily exempt and others notifiable, a single composite filing is required to be made by the parties.

In this regard, in a recent notification filed by Lakshdeep Investments and Finance Private Limited (Lakshdeep/Telewings – C/2012/10/87), the parties sought composite clearance for the series of interrelated transaction, some of which the parties contended were intra-group and therefore not notifiable. Contesting this, in its final order, the CCI only granted clearance for a part of the whole transaction, asking the parties to apply for a clearance in relation to the rest of the series of steps at a later stage.14 In the first appeal filed against a merger control decision, the parties to the proposed combination have approached the Competition Appellate Tribunal (COMPAT) challenging the decision of the CCI.15 After hearing the matter, the COMPAT observed that the findings of the CCI in relation to the intra-group transaction were premature and should be ignored at present. Although this gives partial relief to the parties, the COMPAT has observed that the CCI remains free to use its suo motu powers to issue a notice to the parties, if it believes that the subsequent stages of the transaction need to be inquired into.

Merger filing and review process

Timing of filing

Unlike most other jurisdictions, the Competition Act prescribes that the notifying party (or parties) must file a notification with the CCI within 30 calendar days of either: the final approval of the proposal of merger or amalgamation by the Board of Directors of the enterprises concerned; or the execution of any agreement or other document16 for acquisition of shares, voting rights, assets or control.

In the original filing in the Aditya Birla/Pantaloons case (C-2012/07/69), the CCI, while rejecting the application as being premature, held that the trigger event/document(s) must be of sufficient finality. Accordingly, interim arrangements, such as MoUs (even if they are binding on the parties), which are terminable and/or do not finally determine the exact scope of the proposed combination, would not be accepted as a trigger for filing by the CCI.

Failure to file

The CCI observes the requirement to file within the 30-day period quite strictly, although the Amendment Regulations allow for the CCI to accept a belated notice, at their discretion. Although the CCI has not imposed any penalties for delayed filings to date,17 it is not anticipated that the CCI will continue to take this lenient view going forward.

However, if the parties fail to notify a notifiable combination, the CCI has the power to impose a penalty of up to 1 per cent of the total turnover or value of assets, whichever is higher, of the proposed combination. It is important to note that the CCI has the power to investigate a non-notified combination on its own motion, for up to one year from the date such combination has taken effect.

Responsibility to file

In case of an acquisition or acquiring of control of an enterprise, the acquirer is required to file the notice. In case of a merger or an amalgamation, all the parties to the combination are jointly required to file the notice.

Form of notifications

The Regulations, as amended by the Amendment Regulations, prescribe three forms for filing a merger notification. All notifications are ordinarily required to be filed in Form I (ie, the short form). Most combinations notified to the CCI so far have been made in Form I only. Form I is accompanied by a fee of 1 million rupees.

The parties, however, remain free to file the merger notification on Form II (ie, the long form) based on their own self-assessment of the competitive overlaps and are ‘recommended’ to be filed for transactions where:

  • the parties to the combination are competitors and have a combined market share in the same market of more than 15 per cent; or
  • the parties to the combination are active in vertically linked markets and the combined or individual market share in any of these markets is greater than 25 per cent.

It is pertinent to note that Form II requires extremely detailed information – far more than that required by the (long form) Form CO under the EU Merger Regulation or a ‘second request’ pursuant to the US Hart-Scott-Rodino Act and is accompanied by a filing fee of 4 million rupees.

It is understood that the CCI has received two Form IIs to date and these were filed in respect of:

  • the proposed acquisition of a 65.12 per cent stake in Gujarat Gas Company Limited from BG Asia Pacific Holdings Pte Limited by GSPC Distribution Networks Limited, which is a part of the Gujarat State Petroleum Corporation; this transaction was cleared in Phase I; and
  • the proposed majority stake acquisition of United Spirits Limited by Diageo plc.

Further, in cases where parties have filed a Form I, and if the CCI believes that it requires information in Form II, it may require parties to file the notification in Form II. The Amendment Regulations clarify that, in such a case, the clock will restart once the Form II is filed; this can severely impact deal timelines. Accordingly, the decision of which notification form to file needs to be taken carefully. Further, in cases where there is a material change to the transaction or the parties while the review is underway which significantly changes the CCI’s determination of whether there is an AAEC, the CCI can and in fact has rejected a notification and asked the parties to re-file within 30 days.

In cases of an acquisition, share subscription or financing facility entered into by a public financial institution, registered foreign institutional investor, bank or registered venture capital fund, under a covenant in a loan agreement or an investment agreement, the acquirer is required to inform the CCI of the acquisition in Form III within seven days of completion. There are no filing fees associated with filing Form III.

Pre-notification consultations

It is possible to have oral, informal, binding pre-notification consultations with the CCI, which are limited largely to the procedural aspects of filing a notification with the CCI. The CCI does not offer guidance on jurisdictional or substantive issues during pre-notification discussions.

Phase I Review

On receipt of a notification, the CCI is required to form a prima facie opinion on whether the combination causes or is likely to cause an AAEC within the relevant market in India within a period of 30 calendar days, more commonly known as the Phase I review process. There is no deemed approval at the end of this 30-day period. If the CCI requests the parties for additional information, it stops the clock until the additional information is provided. The CCI has been known to ask for very detailed information in several cases where Form I has been filed, and often this information is of the nature that is usually required to be submitted in Form II. In practical terms, due to the stop of the clock the review period has exceeded 30 calendar days in certain cases and transactions are taking, on average, between 50 and 80 calendar days to clear. However, almost all combinations notified to the CCI to date have been cleared unconditionally in Phase I of the review process.

The Regulations also allow the parties to a combination to propose ‘modifications’ to the combination up-front in Phase I in order to satisfy the CCI that the combination will not cause an AAEC in the relevant market in India. In such a scenario, the CCI will have an additional period of up to 15 calendar days to form its prima facie opinion. Since the merger control regime came into effect, parties have offered modifications only in two cases (reduction in period of non-compete obligation18 and submission of a competition compliance report in respect of certain laws and contracts),19 which was accepted and the transaction was cleared in Phase I. As such, it appears that the CCI is willing to accept modifications in Phase I of the review process if it allays their concerns.

Phase II investigation

At the end of the Phase I review period, if the CCI forms a prima facie opinion that a combination causes or is likely to cause an AAEC, a detailed investigation will follow and the standstill obligation will continue until a final decision is reached by the CCI or a review period of 210 calendar days has passed. This is Phase II of the investigation process. It is important to mention that the proposed amendment to the Competition Act contemplates reducing the overall review period from 210 to 180 calendar days.20

During Phase II of the investigation process, the CCI will ask the parties to explain, within 30 days, why an in-depth investigation in respect of the combination should not be conducted. The CCI may then choose to direct the DG to investigate the combination or do so on its own. Following the receipt of the response of the parties or the DG’s report (whichever is later), the CCI shall direct the parties to publish the details of the combination in four national dailies (including at least two business dailies) and on the respective parties’ websites, inviting any person or member of public who is likely to be affected by the combination to file written objections within 15 working days from the date of publication. Thereafter, the CCI may call for additional information from the parties within 15 working days of the completion of this period. After receipt of the additional information, the CCI has 45 working days to clear or prohibit the transaction or propose modifications.

During the course of the Phase II investigation, if the CCI is of the opinion that the combination has or is likely to have an AAEC, but such adverse effect can be eliminated by suitable modification(s) to the combination, it may propose appropriate modification(s) to address such concerns. The modification process during the Phase II investigation is detailed below:

  • the CCI proposes modifications to offending combinations; then
  • the parties can either carry out such modification within the period specified by the CCI or submit amendments to proposed modifications to the CCI within 30 working days; and
  • if the parties’ proposed amendments are accepted, the CCI will approve the combination; or
  • if the parties’ proposed amendments are rejected, the parties have 30 working days to accept the original modifications proposed by the CCI; or
  • if parties fail to accept the original modification or implement them, then the combination will be prohibited.

Therefore, the time taken to go through and agree scope of the modifications/commitments during a Phase II investigation is a minimum of 60 working days from the date the CCI proposes a modification. This does not include the time the CCI may take to review the amendments proposed by the parties and therefore, in all likelihood it will take longer than 60 working days to examine and accept modifications.

As noted previously, aside from two transactions where parties offered modifications in Phase I, so far the CCI has cleared all transactions unconditionally. In terms of preference as to the type of modification, the CCI officials have clearly indicated their preference for structural remedies as these do not require ongoing monitoring. However, this does not mean that the CCI will not accept behavioural remedies in appropriate cases.

Substantive review

While determining whether a particular transaction has an impact on competition, the CCI looks at various factors listed under section 20(4) of the Competition Act.

The CCI will consider the individual and combined market shares of the parties to the combination as a rough guide to establish whether they have the ability to exercise market power in the relevant market.21 The higher the individual and combined market shares of the parties, the more likely it is that the combination can cause an AAEC. In markets which have high barriers to entry, such as sunk costs, regulations and intellectual property rights protections, a combination of two enterprises may result in them being able to increase prices or profit margins sustainably or significantly without being adequately constrained by competitors, customers or suppliers.

Markets where the parties to a combination are large and have a strong bargaining position, as compared with their suppliers or buyers, could indicate that the combination would allow them to increase prices and thus warrant further investigation. Similar to any other competition authority, the CCI is likely to be concerned with combinations which result in competition in the relevant market decreasing appreciably post-combination. This reduction in competition could be a result of the removal of a vigorous and effective competitor, or the elimination of a maverick in the market. Markets with fewer competitors, homogenous products and low innovation are also likely candidates for further scrutiny, as the CCI is likely to want to ensure competition in the market is not affected post-combination.

To assess the appreciability of any adverse effect, the CCI may consider the benefits of the combination as well. Certain combinations which may be prima facie anti-competitive, but could, for example, result in large efficiencies which would be passed on to consumers, rescue a failing business which would otherwise exit the market or result in a high degree of innovation, may be approved depending on the circumstances of the case. The parties to such combinations would have to highlight such efficiencies upfront and display how such benefits would be passed on to consumers. There have been no cases decided by the CCI so far which discuss such efficiencies. In addition, parties may also be able to demonstrate competitiveness post-combination by ensuring open and non-discriminatory access is offered to third parties, especially where essential facilities are involved.22

In addition, the CCI can and has (in Nestle/Pfizer) looked into the possibility of loss of potential competition by removal of an effective potential competitor from the market. While in this case the CCI found no concerns in relation to potential competition, the buying out of a potentially viable competitor that planned to enter into a market could be a reason for finding that a combination causes or is likely to cause an AAEC.

Encouragingly, the CCI has not defined ‘market’ when assessing the potential impact of a proposed combination where the same is unlikely to impact competition, irrespective of the market definition.23 This is also true of the geographic market definition. Since the CCI is looking to determine whether the combination has an AAEC in India, it has examined the impact of most transactions in India, while leaving the potential geographic market definition open.

Other practical aspects of merger control in India

Filing formalities

The combination registry officials at the CCI are very rigid in terms of filing formalities, and each filing is checked extensively before being accepted. Unfortunately, the CCI has adopted a fairly narrow position in respect of the persons authorised to verify the notification, and only allows a director (on the board of directors) or the company secretary to sign, after due authorisation by the board of directors. It is also necessary to provide the authorisation documents for such signatory, specifically in relation to regulatory filings connected with the proposed transaction. Particular care also needs to be taken in case of filings by non-Indian entities, due to notarisation and legalisation (apostille) requirements, before which the form will not be accepted. Absence of such documents could lead to a filing being not accepted by the CCI.


The CCI allows requests for confidentiality by parties, when these requests are specifically made in writing along with the notification form. The CCI, however, requires that the parties must submit detailed reasons and justifications in support of their confidentiality claims. Once accepted, the CCI would not publish information that the parties have claimed confidentiality on, without first obtaining the permission of the parties. As a general matter, the CCI will grant confidentiality for three years.


Since the enforcement of the merger control regime, nearly 18 months ago, the CCI has been commendably swift in granting approvals allaying all concerns about the timing and the adverse impact that the clearance process may have on the merger and acquisition activity. Additionally, the CCI has been quick and responsive to the concerns raised by various stakeholders by bringing in Amendment Regulations which clarify certain aspects of the scope of the CCI’s review process. With this promise, parties undertaking M&A involving India (or where they have Indian assets or turnover) need not fear the CCI as being yet another bureaucratic hurdle, but instead come prepared to work with the regulator to get their deals through.


  1. Apart from the broad and inclusive definitions provided in the Competition Act, there is presently very little formal guidance from the CCI on how to calculate assets and turnover for the purposes of assessing whether the jurisdictional thresholds are met.
  2. The government of India may revise these thresholds on the basis of changes in the wholesale price index or exchange rate fluctuations, pursuant to a power conferred on them under the Competition Act.
  3. In relation to the targets, the jurisdictional thresholds were prescribed by the Ministry of Corporate Affairs through its notification dated 4 March 2011.
  5. Under the Competition Act, as modified by the government of India Notification dated 4 March 2011 for the purposes of merger control assessment, ‘group’ is defined to mean two or more enterprises which, directly or indirectly, are in a position to:
    • exercise 50 per cent or more of the voting rights in the other enterprise; or
    • appoint more than 50 per cent of the members of the board of directors in the other enterprise; or
    • control the management or affairs of the other enterprise.
  6. An enterprise has been defined in Section 2(h) of the Competition Act as ‘a person or a department of the Government, who or which is, or has been, engaged in any activity, relating to the production, storage, supply, distribution, acquisition or control of articles or goods, or the provision of services, of any kind, or in investment, or in the business of acquiring, holding, underwriting or dealing with shares, debentures or other securities of any other body corporate, either directly or through one or more of its units or divisions or subsidiaries, whether such unit or division or subsidiary is located at the same place where the enterprise is located or at a different place or at different places, but does not include any activity of the Government relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence and space’. Therefore, in assessing the requirement of notifiability of an acquisition of an ‘enterprise, the presence of a division, unit or subsidiary in India will also have to be considered.
  7. Case numbers C-2011/09/04 and C-2011/10/05, both available at
  8. (GS Mace/Max – C- L/2011/12/03), IDFC Private Equity Fund III/GVR Infra Projects Limited (C- L/2011/08/02 – pursuant to a share subscription agreement) and (India Infrastructure Fund/Caparo Energy (C-L/2011/08/01 – pursuant to an investment agreement).
  9. The CCI has not issued any guidance on the type of acquisitions which qualify as ‘solely for investment’.
  10. While the Amendment Regulations have increased this threshold from 15 per cent to 25 per cent, bringing it in line with the SEBI Takeover Regulations, the CCI now considers instruments that entitle the acquirer to hold 25 per cent or more at a future date, at the time of their issuance, in assessing the 25 per cent threshold.
  11. SAAB/Pipavav [C–2012/11/95]
  12. UTV/Walt Disney (C-2011/08/02) and STAR TV ATC/ESPN Star Sports (C – 2012/07/64).
  13. Independent Media Trust (RIL Group/Network 18 Group) (C-2012/03/47), MSM India/SPE Holdings/SPE Investments/Grandway/Atlas (C-2012/06/63), (MSM/Sony), Century Tokyo Leasing Corporation/Tata Capital Financial Services Limited (C-2012/09/78).
  16. The Regulations clarify that ‘other document’ shall mean any binding document, by whatever name called, conveying an agreement/decision to acquire control, shares, voting rights or assets.
  17. In relation to certain merger control filings, the CCI accepted the delayed notification without imposing any penalty giving notifying parties the benefit of recent enforcement of the merger control provisions.
  18. Orchid Chemicals/Hospira Healthcare (C-2012/09/79).
  19. GSPC Distribution Networks/Gujarat Gas Company (C-2012/12/88).
  21. Section 20(4)(h) of the Competition Act.
  22. GSPC Distribution Networks/Gujarat Gas Company (C-2012/12/88)
  23. For example see, Nippon Steel Corporation/Sumitomo Metal Industries (C-2011/10/07) decision, available at and GSPC Distribution Networks /Gujarat Gas Company (C-2012/12/88) decision, available at

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