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Apr 5, 2022 · Mergers and acquisitions in India reached near an all-time high in the year 2021 after deals worth US $90.4 billion were struck in the first nine months. Of these, a total of 95 combinations were notified to the Competition Commission of India (“CCI”).
Apr 5, 2022 · Mergers and acquisitions in India reached near an all-time high in the year 2021 after deals worth US $90.4 billion were struck in the first nine months. Of these, a total of 95 combinations were...
In the last 10 years, the CCI processed close to 840 merger notifications and developed a broadly consistent jurisprudence. No transaction has been blocked by the CCI so far. The CCI found no competition concerns in most of the transactions notified to it.
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Feb 7, 2024 · Currently, PRIIPs are regulated in the UK by the retained EU law version of Regulation (EU) No 1286/2014, which has been in force since January 2018 (PRIIPs Regulation). The draft statutory instrument provides for the replacement of “PRIIPs” with a new term: “Consumer Composite Investments” (CCIs). New regulations relating to CCIs (the ...
- Exemptions
- Key Concepts in Merger Control and Recent Developments
- Trigger Events and Form of Filing
- Deadline For Filing and Timeline For Clearance
- Invalidation
- Failure to Notify and Limitation
Transactions that meet the jurisdictional thresholds may avail certain exemptions under the Competition Act or the Combination Regulations.
The concept of control under the Competition Act 2002
The interpretation of the term ‘control’ forms one of the cornerstones of the Indian merger control framework. This is on account of the fact that several of the exemptions under Schedule I (as discussed above) pivot around these terms. The CCI has analysed different degrees of control in competition law. The first degree of control identified by the CCI is material influence, which constitutes the lowest level of control and gives an enterprise the ability to influence the affairs and manage...
Trigger events
Transactions are required to be notified to the CCI upon the occurrence of one of the following trigger events: In the case of acquisitions, the trigger is the execution of binding transaction documents or any other binding document that indicates an agreement to acquire control, shares, voting rights or assets. A subset of acquisitions are transactions involving takeover of listed companies pursuant to an open offer in terms of the Securities and Exchange Board of India (Substantial Acquisit...
Trigger for acquisition of distressed assets
In relation to acquisitions of distressed assets under the Insolvency and Bankruptcy Code 2016 (the Code), the CCI must be notified upon finalisation of the acquirer’s resolution plan. Pursuant to the recent view of the National Company Law Appellate Tribunal in its decision in Arcelormittal India Pvt Ltd v. Abhijit Guhathakurta(Company Appeal (AT) (Insolvency) No. 524 of 2019), obtaining the approval of the CCI before a resolution plan is approved by the committee of creditors is directory i...
Form of filing
Parties can either file a short Form I (as amended) or a long Form II with the CCI. A Form III (post completion notification) is prescribed for certain exempt transactions. If parties are competitors and hold a market share exceeding 15 per cent or if parties are vertically integrated and hold an individual or combined market share exceeding 25 per cent, a Form II filing is recommended.
Phase I investigation and prima facie review
The CCI is required to form a prima facie opinion on whether a proposed combination would cause an AAEC within 30 working days of the parties notifying it. If the CCI reaches out to third parties for the assessment of the impact of a transaction, an additional 15 working days are available to the CCI for the assessment to be completed. If the CCI’s prima facie opinion is that the transaction does not or is not likely to cause an AAEC in India, the CCI passes an order approving the proposed co...
Request for additional information and clock stops
The CCI may request additional information from the parties to the combination. The assessment clock stops while the parties respond to requests for information from the CCI and the time taken by the parties to respond is excluded from the 30-working days timeline.
Show-cause notice (SCN) and response to SCN
If the CCI is of the opinion that there is likely to be an AAEC in the market, a notice is issued to the parties requiring them to explain why a detailed investigation to assess the proposed combination’s competitive effects should not be conducted. If the parties successfully address the CCI’s concerns in response to the SCN, which could include offering voluntary behavioural or structural remedies, the CCI may approve the transaction. If the CCI’s concerns persist, it will commence a Phase...
Invalidation of notice
The CCI has the authority to invalidate any notification filed by parties if the notification is incomplete or not in compliance with the Combination Regulations. An opportunity to be heard prior to invalidation may be given by the CCI to the parties.
Withdraw and refile
Parties have the option of withdrawing and refiling a fresh merger notification. The filing fee already paid to the CCI is adjusted against the fee payable for the new notification, provided the new notification is given within three months from the date of withdrawal. The timeline for review of an invalidated notice will restart when the complete form is refiled with the CCI.
Global transactions
The parties to a global filing must ensure that they receive the CCI’s approval before the transaction closes globally and in India. The trigger event for notifying global transactions could either be a country specific implementation agreement or the global agreement. Carve outs and hold separate agreements are not permitted by the CCI unless parties establish that they continue to operate independently in Indian markets.
Gun-jumping
The maximum penalty for failure to notify a combination to the CCI is 1 per cent of the combined assets or turnover, whichever is higher, of the combining parties. In December 2021, the CCI imposed the highest-ever penalty of 2 billion rupees on Amazon for gun-jumping in relation to its investment in Future Coupons Private Limited (FCPL).
Power of the CCI to look back at effects of the transaction
The CCI can look back at the effects of a transaction that was not notified for a period of one year from the date of its completion based on its own information or knowledge of any transaction. There is no time limitation to the CCI’s power to penalise parties for a failure to notify it.
Orders of the CCI and remedies
So far, the CCI has cleared eight Phase II investigations with modifications and approved transactions as part of protracted Phase I investigations where the parties voluntarily offered to divest certain assets. While the CCI has publicly stated that it prefers structural remedies over behavioural remedies, the remedies accepted by the CCI depend on the specific facts of each case.
May 19, 2021 · While there is no clear guidance from the CCI on such forms and degrees of control, the following can be identified on the basis of its own decisional practice: (1) controlling interest or de jure control; (2) de facto control; (3) decisive influence; and (4) material influence.
People also ask
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Apr 21, 2021 · Since the Indian merger control regime came into effect on 1 June 2011, over 800 notifications have been filed with the CCI.
