What the overhaul of India’s merger control regime means
Subscribe to enjoy similar stories. The date 10 September 2024 marked a watershed moment for the Indian merger-control regime. Notified by the ministry of corporate affairs and the Competition Commission of India (CCI), the amendments represent a major overhaul.
They are expansive and include several industry-friendly changes. On the flip side, the introduction of a deal value threshold (DVT) for merger approval, hike in filing fees, lower threshold for ‘control’ and narrowed scope of approval-exemptions for minority-stake acquisitions are likely to result in a spike in transactions notifiable to the CCI and an increased regulatory burden on industry, which would necessitate massive capacity enhancement at the already overburdened CCI to ensure ease of doing business. With the sector-agnostic DVT, India joins a number of jurisdictions such as the US, Germany, Austria and South Korea whose merger-control regimes include a value-of- transaction test with a local nexus requirement.
In India, any deal valued above ₹2,000 crore now needs CCI approval. But just because a regulator scrutinizes a deal does not mean it has anti-competitive effects. Combination regulations have clarified that the amended provisions would also apply to deals that are yet to be consummated, wholly or partly.
This will impact transactions where definitive documents have been signed but the deals are yet to be closed. The silver lining is that for partly completed deals which were earlier exempt and are now notifiable (on meeting the DVT), a complete safe harbour has been provided where no gun-jumping proceedings are initiated. In a welcome move for acquisitions of listed companies, the CCI has also eased the approval regime for open-offer-oriented
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