1) Is a merger control regulation in force?

Yes. The merger control regime in India is primarily governed by the Competition Act, 2002 (as amended) (Competition Act), Competition Commission of India (Combination) Regulations, 2024 (Combination Regulations); Competition (Minimum Value of Assets or Turnover) Rules, 2024 (De-minimis Rules) and Competition (Criteria of Combination) Rules, 2024 (Criteria of Combination Rules).

2) Which authorities enforce the merger control regulation?

The Competition Commission of India (CCI) is the sole national statutory authority that enforces provisions relating to merger control under the Competition Act and its related regulations. 

Appeals against orders of the CCI lie to the National Company Law Appellate Tribunal (NCLAT). The orders of the NCLAT can further be appealed to the Supreme Court of India (Supreme Court).

3) Relevant regulations and guidelines with links:

Please find below all relevant links to the Competition Act, Combination Regulations, other relevant regulations, guidelines, forms and notifications relating to the Indian merger control regime:

4) Does general competition regulation apply to mergers or ancillary restrictions?

While merger provisions under the Competition Act govern the merger approval process, the Competition Act and associated rules/ regulations also contain substantive provisions which deal with anti-competitive agreements and abuse of dominance. These provisions apply to the conduct of entities involved in a merger. Further, the CCI may analyze ancillary restrictions such as non-compete or exclusivity clauses as part of the merger review process and may suggest modifications / adjustments to any of such clauses if they are found to be unreasonable or are likely to cause Appreciable Adverse Effect on Competition (AAEC) in India. The CCI may give its approval subject to the modifications / conditions as it may deem appropriate. Mergers which are not notifiable to the CCI are not governed by the merger provisions, however general competition rules may be applied to the conduct of entities. There are no provisions in the Competition Act wherein parties can oppose a non-notifiable merger. 

5) May an authority order a split-up of a business irrespective of a merger?

The CCI has the authority to pass an order relating to the division of an enterprise enjoying dominant position under Section 28 of the Competition Act to ensure that such an enterprise does not abuse its dominant position. Further, Section 28 also provides for the following as a part of an order for division of the dominant enterprise:

1. transfer or vesting of property, rights, liabilities or obligations;
2. the adjustment of contracts either by discharge or reduction of any liability or obligation or otherwise;
3. the creation, allotment, surrender or cancellation of any shares, stocks or securities;
4. the formation or winding up of an enterprise or the amendment of the memorandum of association or articles of association or any other instruments regulating the business of any enterprise;
5. the extent to which, and the circumstances in which, provisions of the order affecting an enterprise may be altered by the enterprise and the registration thereof;
6. any other compliances which may be necessary to give effect to the division of the enterprise.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

The CCI is the only authority responsible for enforcing merger control regulations under the Competition Act and related regulations in India. Nevertheless, transactions that occur in regulated sectors (e.g., banking, telecommunications, oil and gas, etc.) may also require an additional analysis by the respective regulatory bodies. In those cases, the CCI and the regulatory bodies usually conduct independent analyses according to their own specific statute/ rules. For instance, no banking company shall be amalgamated with another banking company, unless the scheme containing the terms of such amalgamation has been approved by its shareholders and the Reserve Bank of India.  

Foreign investment control

The Government of India has put in place a policy framework on Foreign Direct Investment (FDI), the latest being the Consolidated FDI policy 2020 published on 15 October 2020. This Consolidated FDI Policy may be updated timely to incorporate any amendments which may have been passed..

The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, Government of India makes policy pronouncements on FDI through Consolidated FDI Policy Circular/Press Notes/Press Releases which are notified by the Department of Economic Affairs (DEA), Ministry of Finance, Government of India as amendments to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 under the Foreign Exchange Management Act, 1999 (FEMA). These notifications take effect from the date of issue of Press Notes/ Press Releases, unless specified otherwise therein. In case of any conflict, the relevant Notification under Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 will prevail. The payment of inward remittance and reporting requirements are stipulated under the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 issued by the Reserve Bank of India (RBI). The regulatory framework, over a period of time, thus, consists of FEMA and Rules/Regulations thereunder, Consolidated FDI Policy Circular, Press Notes, Press Releases, Clarifications, etc.

Based on the FDI policy, foreign investments can be made in India through two routes, viz., automatic route or Government route. Investments in certain sectors follow an automatic route, where notification is required but no approval from the Government or any of its departments or ministries is required. Whereas under the Government route, the investments require prior permission or approval of the Indian Government or any of its Department/Ministries.

The current FDI policy prescribes two categories of sectors i.e. prohibited sectors and permitted sectors. No foreign investment is allowed in the prohibited sectors such as gambling, cigarettes, tobacco manufacturing, atomic energy, railway operations, etc.

Whereas, in the permitted sectors, the extent of foreign investment allowed under the FDI Policy varies from sector to sector and is subject to the approval from the Government or any of its Departments or Ministries. It includes businesses such as agriculture, telecom, mining, services, defence, print-media, transportation, etc.

Scope of the FDI regime

Any non-resident entity can invest in India, subject to the FDI Policy except in the prohibited sectors/activities. However, an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route.

Sometimes foreign investors also need to satisfy certain specific eligibility conditions as prescribed by the Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI). 

Different conditions are prescribed for different modes of investments such as investment in an Indian company or trust or partnership firm can be made by various methods e.g. through alternate investment fund (AIF) or infrastructure investment trust (InvIT), etc.

Transactions and thresholds

Investments can be made by non-residents in the capital of a resident entity only to the extent of the percentage of the total capital as specified in the FDI policy. The caps in various sector(s) are detailed in Chapter 5 of the Policy. There are no turnover thresholds for determining whether a foreign buyer should proceed to seek FDI approval from the Government or not. The thresholds or caps prescribed under the FDI Policy are in relation to the maximum percentage of foreign investment or capital that a foreign buyer can invest in a sector. Such caps vary across sectors and range from 100% to 26%, i.e. while in certain sectors 100% foreign investment is permissible, in some others only 26% foreign investment is permissible. Any investment equal to or above 49% may be subject to automatic or Government approval route, depending on the prevailing FDI policy.

Procedures 

Proposals for foreign investment are examined by the relevant competent authorities as per the Standard Operating Procedure laid down by DPIIT.

Transactions involving a total foreign equity inflow of more than INR 5000 crore, are also reviewed by the Cabinet Committee on Economic Affairs.

Concurrence of the DPIIT must be sought by the competent authority where it proposes to reject a transaction as well as in cases where conditions for approval are stipulated in addition to the conditions laid down in the FDI policy or sectoral laws/regulations.

The details of the guidelines for filling applications seeking approval are available at the Foreign Investment Facilitation Portal (www.fifp.gov.in) (see Chapter 4 of the FDI Policy).

Please find below all relevant links to the Foreign Exchange Management Act, 1999, Consolidated FDI Policy, other relevant regulations, guidelines, forms and notifications relating to the Indian Foreign Investment Control Regime:

7) Are any parts of the territory exempted or covered by particular regulation?

The Competition Act is applicable to the whole of India.

8) Is merger filing mandatory or voluntary?

The Indian merger control regime is mandatory and suspensory in nature. Notifiable transactions cannot be consummated (entirely or in part) before the CCI provides its approval. 

9) Is there a general definition of transactions subject to merger control?

Mergers and Acquisitions (M&A) that meet either asset, turnover or value of transaction thresholds prescribed under the Competition Act are termed as ‘combinations’. Combinations require notification to and approval of the CCI prior to their consummation. The Indian merger control regime covers acquisitions of control, shares, voting rights or assets and also mergers and amalgamations under the Competition Act (please note that in this guide “merger” is generally used as the broad term covering all types of transactions such as acquisitions, mergers, amalgamations, demergers etc., subject to merger control, instead of “combination”). 

10) Is "change of control" of a business required?

“Change of control” is not a mandatory criterion for a merger to be subjected to the merger review process of the CCI. Acquisition of minority stakes (not amounting to acquisition of control) by private equity investors, where the private equity investors hold certain portfolio investments in companies that are engaged in such business activities that may lead to potential horizontal, vertical or complementary links with that of the target, may also be required to be notified to the CCI.

Although a merger may result from a change of control over a business, it only requires a mandatory notification to the CCI under the Competition Act and its regulations if the financials of the transacting parties or deal value exceed the thresholds described in topic 14.

Also see topic 23.

11) How is “control” defined?

As per the Competition Act, “control” means the ability to exercise material influence, in any manner whatsoever, over the management or affairs or strategic commercial decisions of the target entity(ies). As per the CCI, control conferring rights include affirmative rights which confer the ability to influence the outcome on policy and commercially strategic matters. An illustrative list of rights which are potentially control conferring are as follows:

1. appointment / removal of senior management personnel including directors;
2. approval of budget, business plans;
3. alteration of charter documents of a company;
4. rights relating to operational parameters;
5. veto rights;
6. information rights (not available in the public domain or with ordinary shareholders).

Further, there can be a situation where an inference of control may be drawn, despite there being no contractual relationships. For instance, an enterprise can still be considered to have the ability to control in situations where the director(s) nominated possesses expertise, status etc. which allows demonstrated ability to influence the other members of the board. Furthermore, having an observer seat does not imply material influence over the affairs of the target enterprise. Thus, ‘control’ as per the CCI is subjective and has to be ascertained on the basis of a host of factors.

12) Acquisition of a minority interest

Acquisition of shares or voting rights may be subject to merger notification even if the acquisition does not result in change of control. However, acquisition of a minority interest that is made solely as an investment or in the acquirer’s ordinary course of business and does not lead to gaining of control over a business or any change of control over the business, is exempted from a merger notification to the CCI even if such a transaction triggers the jurisdictional thresholds and does not fall within the small target exemption.

If the acquisition of a minority interest confers the acquirer with de facto or de jure control of a business, the transaction will be subject to merger control regulations subject to the financial thresholds under the Competition Act..

Also see topic 23.

13) Joint ventures/joint control – which transactions constitute mergers?

Joint Ventures 

The Competition Act does not expressly cover joint ventures. Joint ventures created through transfer of assets by one or more enterprises (also referred to as brownfield joint ventures) may be notifiable provided the thresholds in topic 14 are met. Joint ventures formed afresh by capital contributions by one or more enterprises (also referred to as greenfield joint ventures) are generally exempted from the requirement of notification to the CCI.

While determining the applicability of the thresholds in topic 14, the values of only the relevant assets, being transferred by the parent(s), and the turnover generated by such relevant assets, need to be considered for threshold purposes.

Joint Control

Mergers involving change in the quality / degree of control may be notifiable to the CCI if they exceed the prescribed thresholds under the Competition Act and its rules/ regulations. This also covers situations of joint-to-joint control and not only instances of joint to sole / sole to joint control.

14) Which thresholds decide whether a merger notification must be filed?
(Unless explicitly stated otherwise, the thresholds described under one threshold category are not cumulative with those described under another category. Thus for instance if there is a market share threshold and a turnover threshold, it is sufficient to meet one of these, unless stated otherwise.)

a) Turnover thresholds

All transactions (including foreign-to-foreign transactions) that exceed the thresholds under the Competition Act are required to be notified to the CCI. The analysis of the thresholds consists of a combined asset/turnover assessment (based on the assets/turnover of the parties or their respective group(s)). 

A transaction must be notified if the transaction is not exempt under the ‘Small Target Exemption’ and the thresholds in either the Parties Test or the Group Test are met:

Small Target Exemption: 

A merger is exempt from notification to the CCI if the value of assets of the target in India do not exceed INR 4.5 billion or the value of the turnover of the target does not exceed INR 12.50 billion, respectively. This exemption is available pursuant to the notifications issued by the Ministry of Corporate Affairs dated 7 March 2024 and the De Minimis Rules.

Jurisdictional Thresholds:

Parties Test: The parties (i.e. the legal persons directly involved in the transaction) have

1. combined assets in India of INR 25 billion or a combined turnover in India of INR 75 billion;
2. combined worldwide assets of USD 1.25 billion, including combined assets in India of INR 12.50 billion; or
3. combined worldwide turnover of USD 3.75 billion including a combined turnover in India of INR 3.75 billion.

Group Test: The group (i.e. the group that the parties will belong to after the transaction, including the parties, their ultimate parent(s) and all entities directly or indirectly controlled by the ultimate parent(s)) has

1. assets in India of INR 100 billion or a turnover in India of INR 300 billion;
2. worldwide assets of USD 5 billion including assets in India of INR 12.5 billion; or
3. a worldwide turnover of USD 15 billion including a turnover in India of INR 37.5 billion.

b) Market share thresholds

N/A

c) Value of transaction thresholds

The deal value assessment is a two-pronged test (both must be met to trigger a merger notification), the first of which is based on whether the value of transaction exceeds the threshold under Section 5(d) of the Competition Act whereas the second consists of satisfying that the enterprise being acquired, taken control of, merged or amalgamated has ‘substantial business operations in India’ (SBOI). 

Value of transaction: As per section 5(d) of the Competition Act read with the Combination Regulations, if the value of transaction including the acquisition of any control, shares, voting rights or assists of an enterprise, merger or amalgamation exceeds INR 20 billion, then the transaction must be notified to the CCI for prior approval even if financial thresholds are not exceeded.

The value of transaction includes every valuable consideration, whether direct or indirect, immediate or deferred, cash or otherwise and may include (non-exhaustive list):

1. Any separately agreed consideration on account of any undertaking or restriction imposed on any party (including for example, non-compete fees);
2. All incidental arrangements entered into between the parties within two years of the transaction taking effect;
3. For call options, assuming full exercise of such call options (without discounting to present value);
4. The value attributable to all interconnected steps; and
5. Consideration payable (as per best estimates) based on the occurrence of a future event/outcome captured in the transaction documents.

Consideration of all acquisitions between the parties within two years prior to the trigger event is also to be included to calculate the value of the transaction. In case a transaction involves an open offer, full subscription to the offer must be considered for determining the value of the transaction.

Critically, the Combination Regulations provide that, if the precise value of a transaction cannot be established with reasonable certainty, the transaction may be considered to exceed the prescribed deal value of INR 20 billion.

Substantial Business Operation: Depending on the sector that the target enterprise is involved in, Substantial Business Operations (SBO) will be determined as follows:

In the case of Digital Services, SBO is applicable if any of the following criteria are met:

1. 10% or more of the total global business user or end users must be based in India. Here in business users or end users are to be determined on the basis of average number of total users for 365 days preceding the relevant date, or
2. 10% or more of the target’s total gross merchandise value (GMV) is from India, or
3. 10% or more of the target’s global turnover for the preceding financial year is from India

For sectors other than Digital Services, SBO is applicable as follows:

1. 10% or more of the target’s total GMV (of 12 months preceding the relevant date) is from India; and the GMV in India is more than INR 5 billion; or
2. 10% or more of the target’s total global turnover derived from all products and services for the preceding financial year is from India; and the turnover is more than INR 5 billion.

Herein GMV includes cash, receivables, or other consideration either for or facilitating, sale of goods and/or provision of services, by an enterprise, on its own or as an agent or otherwise. ‘Business user’ refer to any natural or legal person supplying goods or services including through the use of digital services, whereas  ‘End user’ refer to any natural or legal person using digital service other than as a business user, for informational or transactional purposes.

For the purposes of examining notifiability, the relevant date will be date of each of the trigger documents – date on which the approval relating to the proposed merger or amalgamation is accorded by Board of Directors or the date of execution of agreement or the date of such other document for acquisition or acquiring of control; and notifiability would have to be determined accordingly.

d) Assets requirements

See turnover thresholds above.

e) Other

N/A

15) Special thresholds for particular businesses

The Competition Act does not provide for any special thresholds for particular businesses.

16) Rules on calculation and geographical allocation of turnover

The threshold analysis prescribed under the Competition Act and as per decisional practices of the CCI, must be conducted in reference to the audited financial statements of the financial year immediately preceding the year in which the transaction will be completed. If audited statements are not available, a report certified by the statutory auditor on the basis of the last available audited statements, may be used.

The thresholds analysis is conducted using the consolidated audited financial statements of the parties, and group if the group tests are applied. Total assets must be based on the consolidated balance sheet (less depreciation) and total turnover must be based on the consolidated profit and loss statement including  revenue from operations (may include ‘other income’ only if auditor of the enterprise opines that certain items of the ‘other income’ are to be classified as ‘revenue from operations’) but excluding revenues from exports, indirect taxes, trade discounts and all amounts generated through assets or business from customers outside India other income not connected with operations, intragroup sales (only sales between Indian group entities are to be excluded while determining the Indian turnover). 

In asset acquisitions, business transfers etc., the asset/turnover of only the true target (and not the seller) is to be considered while applying the Small Target Exemption, Parties and Group Tests.

Is the seller/seller’s group turnover relevant in a standard acquisition of sole control?

No.

17) Special rules on calculation of turnover for particular businesses

follows:

Banking

For banking undertakings, the value of the turnover is the sum of the following items: operating income i.e interest income of a baking enterprise an income such as:

1. commission, exchange, and brokerage;
2. income earned by way of dividends;
3. profit/loss on sale of investments;
4. leasing income and;
5. profit/loss on exchange transactions.

Insurance

For insurance undertakings, the value of the turnover is

1. the gross premium without deducting the reinsurance ceded, and
2. other income such as income from investments in shares, securities, real estate and other assets where such investments amount to control over the enterprises involved.

Private Equity Funds

For PE Funds, the value of turnover/assets of the controlled portfolio entities are also relevant for the purpose of assessing the asset/turnover based thresholds.

Fund management businesses

Fund management businesses/pooled investment schemes generally envisage demutualisation of investment management and ownership, wherein the subscribers give authority to the investment managers to conduct the operations of the fund. The investment manager of the fund, being the authority to exercise and protect such interest, would invariably enjoy control over the portfolio entities where the shareholding and/or contractual rights of the fund is such as to enable material influence or higher degree of control over such portfolio entities. When the management of such a fund is acquired, the acquirer would gain control over the portfolio entities of the fund. Accordingly, in addition to the target business i.e. management of the fund, the value of assets and turnover of the controlled portfolio entities are also relevant for the purpose of computing thresholds.

18) Series of transactions that must be treated as one transaction

As per the Combination Regulations, where the “ultimate intended effect” of a business transaction is achieved by way of series of steps or smaller individual transactions which are interconnected, one or more of which amount to a notifiable transaction, a single notice covering all these transactions shall be filed by the parties. Further, the requirement of filing a notice shall be determined with respect to the substance of the transaction, and any structure which has the effect of avoiding the notice shall be disregarded.

Further, acquisitions by two different acquirers can also be considered as interconnected, if different investors come together with mutual understanding with regard to the decision of making an investment in an enterprise. Mutual understanding to invest can be inferred from one or more factors such as simultaneity, common agreement, mutual interdependence/conditionality, functional links and internal consideration of the investors. Further, the mere presence of separate share purchase agreements alone is not enough to conclude that the transaction is not interconnected, if there are other factors which suggest otherwise.

Steps of an inter-connected transaction or a series of multiple transactions that may not be notifiable as standalone transactions will also have to be notified to the CCI and cannot be closed before obtaining CCI’s approval.

19) Temporary change of control

Under the Competition Act no distinction has been made between temporary or lasting change of control. Any kind of change of control (quality or quantity), is regarded as an important factor in assessing the nature of an acquisition under the Competition Act or for assessing if any merger can be exempted from notification requirements under the Exemption Rules.

20) Special industries, owners or types of transactions

The Competition Act empowers the Central Government to provide exemption to any enterprise which performs sovereign function on behalf of the Central Government or a State Government; or any class of enterprise if such exemption is necessary in the interest of security of the State or public interest; or any practice or agreement arising out of and in accordance with any obligation assumed by India under any treaty, agreement or convention with any other country or countries. The following exemptions are applicable in relation to the provisions regarding mergers:

1. Exemption to Regional Rural Banks: All Regional Rural Banks notified under section 23(A)(1) of the Regional Rural Banks Act, 1975 have been exempted from the requirement to notify the CCI for a period of 5 years from 14 July, 2023.
2. Exemption to banking companies: A banking company as notified by the Central Government under section 45 of the Banking Regulation Act, 1949 have been exempted from notifying the CCI for a period of 5 years from 11 March 2022.
3. Exemption to Nationalized Banks: Reconstitution, transfer (whole or part), and amalgamation of nationalized banks have been exempted through a notification issued under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 for a period of 10 years from 30 August 2017.

21) Transactions involving only foreign businesses (foreign-to-foreign)

There is no exemption for foreign-to-foreign transactions. All transactions, including foreign-to-foreign transactions, that exceed the thresholds of assets, turnover or deal value under the Competition Act, are required to be notified to the CCI.

22) No overlap of activities of the parties

There is no exemption for transactions with no overlap of activities, but there is a simplified procedure available if there is no overlap. The CCI has introduced the concept of a “Green Channel” approval route under the Combination Regulations and Criteria of Combination Rules which allows parties to file a simplified version of a Form I and receive deemed/spot approval of the transaction immediately upon notifying the CCI. However, it applies to only those transactions where the acquirer (and the acquirer group) has no existing interests in companies:

1. that may be seen as competitors of the target's business;
2. that operate in markets with vertical linkages to the target's business; or
3. with complementary linkages to the target's business.

23) Other exemptions from notification duty even if thresholds ARE met?

The following transactions are exempted from being notified to the CCI as per the Exemption Rules:

24) May a merging party file voluntarily even if the thresholds are not exceeded?

No. However, the parties should explore a pre-filing consultation with the CCI in case of any interpretational/threshold issues.

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

No. 

26) Referral within the jurisdiction

A statutory authority , like Telecom Regulatory Authority of India, Central Electricity Regulatory Commission, Petroleum and Natural Gas Regulatory Board etc. when dealing with an issue which may have implications under the Competition Act can make a reference to the CCI for its opinion as per Section 21 of the Competition Act. Further, as per Section 21A of the Competition Act, the CCI can make a reference to a statutory authority (see list above) for its opinion where a decision by the CCI could be in conflict with the statute whose implementation is entrusted with the particular statutory authority.

27) Referral from another jurisdiction

The CCI has signed memorandums of understanding with various overseas competition authorities, including that of the US Federal Trade Commission, the European Commission, the Federal Antimonopoly Service of Russia, the US Department of Justice, the Canadian Competition Bureau, and the Australian Competition and Consumer Commission, Egyptian Competition Authority, Competition Commission of Mauritius to enhance cooperation and communication between the competition authorities. It may consider references from or may refer issues to, such authorities in pursuance of these bi-lateral memorandums of understanding. 

28) Referral to another jurisdiction

See topic 27.

29) May the merging parties request or oppose a referral decision?

N/A

30) Stage of transaction when notification must be filed

Notifiable transactions must be notified to the CCI at any time after the occurrence of the trigger event, but before the transaction is consummated (entirely or partially). However, in relation to acquisitions of distressed assets under the Insolvency and Bankruptcy Code 2016, the parties must submit a notification form to the CCI and obtain its approval before the Committee of Creditors approve the resolution plan.

31) Pre-notification consultations

Parties intending to file a notice with the CCI are encouraged to approach the CCI for an informal pre-filing consultation in case of any interpretational issues, queries regarding the filing procedures or the information to be provided as part of the merger filing. However, the advice given during such pre-filing consultation is non-binding and may not necessarily reflect the views of the CCI.

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

Mergers that are a consequence of acquisition of securities on a stock exchange or a public takeover bid must be notified to the CCI within thirty days from the date of first acquisition of shares pursuant to the implementation of an open offer and the acquirer must not exercise ownership or beneficial rights over the acquired securities until the CCI approves the transaction. 

33) Forms available for completing a notification

Parties can either file a short form (Form I) or a long form (Form II) with the CCI. 

If parties are competitors and hold a market share exceeding 15%, or if parties are vertically integrated and hold an individual or combined market share exceeding 25%, a Form II filing is recommended.

34) Languages that may be applied in notifications and communication

English.

Parties may also file documents drawn up in Hindi; however, such documents must be accompanied by a true translation in English.

35) Documents that must be supplied with notification

Generally, the following documents are required to be filed along with the notice in Form I:

1. Certified copy of the authorization in favour of a person signing the notice.
2. Copy of the proof of payment of filing fee.
3. Copies of the relevant parties’ approval of the merger.
4. An authorization letter in favour of a person located in India who is authorized to receive communication on behalf of the notifying party(ies) from the CCI.
5. Copies of the most recent annual report and accounts of the parties to the merger.
6. A summary (not more than 1000 words) of the merger.
7. An affidavit in support of the request for confidentiality.

36) Filing fees

The filing fee for Form I is INR 30 Lakhs and the filing fee for Form II is INR 90 Lakhs.

37) Is implementation of the merger before approval prohibited?

Yes. the parties must run separately and independently until the merger has been approved by the CCI. However, normal preparatory reversible steps are not prohibited (see topic 39).

38) May the parties get permission to implement before approval?

No. Neither the Act nor the Rules/Regulations framed thereunder empower the CCI to grant permission to implement the transaction (or any part thereof) before its approval. 

39) Due diligence and other preparatory steps

Due diligence must be conducted in a way that prevents sensitive market information from being used for purposes other than assessing the viability of a merger. To this effect, the parties are advised to put in place appropriate non-disclosure agreements and execute “clean-team” agreements. 

40) Veto rights before closing and "Ordinary course of business" clauses

An "ordinary course of business" clause that prevents the target company from taking decisions outside the course of its ordinary business until the closing date is generally considered acceptable.

The parties to any transaction must continue to be competitors and should keep their respective businesses in India separate and are required to operate and continue to take their respective business decisions independently. In this regard, the parties cannot exercise any veto rights upon each other till they receive the CCI’s approval.  

41) Implementation outside the jurisdiction before approval – "Carve out"

If a CCI approval is required, the parties must not implement the transaction globally and/or within in India before the CCI approval. 

42) Consequences of implementing without approval/permission

The parties may be fined if the merger is implemented or any parts thereof before obtaining approval of the CCI. The CCI can impose a penalty which may extend to 1% of the total assets or turnover or the value of the transaction, whichever is higher, of the merging parties. 

43) Phases and deadlines

44) Tests or criteria applied when a merger is assessed

Under Section 20(4), the CCI assesses various positive and negative factors to determine whether a merger has or is likely to have any AAEC in India. Some of the factors considered by CCI are listed below:

1. Actual and potential level of competition through imports in the market;
2. Extent of barriers to entry in the market;
3. Level of concentration in the market;
4. Degree of countervailing power in the market;
5. Likelihood that the merger would result in the parties to the merger being able to significantly and sustainably increase prices or profit margins;
6. Extent of effective competition likely to sustain in a market;
7. Extent to which substitutes are available or are likely to be available in the market;
8. Market share, in the relevant market, of the merging parties individually and combined;
9. Likelihood that the merger would result in the removal of a vigorous and effective competitor in the market;
10. Nature and extent of vertical integration in the market;
11. Possibility of a failing business;
12. Nature and extent of innovation;
13. Relative advantage, by way of the contribution to the economic development; and
14. Any benefits of the merger that may outweigh the adverse impact of the merger.

45) May any non-competition issues be considered?

N/A

46) Special tests or criteria applicable for joint ventures

There are no special tests or criteria for joint ventures.

47) Decisions and remedies/commitments available

A merger may be approved unconditionally, approved with conditions/commitments or prohibited. Where the CCI is of the opinion that a merger has or is likely to have an AAEC in India, the parties can submit an offer of appropriate modifications. If the CCI does not accept such modifications, the CCI issues a notice to the parties who can then submit a revised offer. The CCI may also suo moto propose appropriate modifications to the merger which the parties may consider. In the event, the modifications as proposed by the parties are not acceptable to the CCI, it may block the merger.

48) How and when will details about the merger be published?

The CCI requires the parties to submit a 1000-word summary of the proposed merger (not containing any confidential information), for publication on the CCI’s website as soon as the parties file the merger notification.

Once the merger is approved, the CCI informs the parties and also to the public at large via press releases. The detailed approval order of the CCI only follows after a period of a few weeks from the date of approval of the CCI and is subsequently published on its website. Please note that the non-confidential version of the approval order passed by the CCI is published on its website.

The CCI, if it is prima facie of the opinion that a merger has, or is likely to have, an AAEC in India, direct the parties to publish details of the merger publicly for bringing the merger to the knowledge or information of the public and persons affected or likely to be affected by such merger.

49) Access to the file for the merging parties and third parties

The merging parties:

The parties to a merger have a right to access the files relating to the merger notification

Third parties:

Third parties do not have access to the file.

50) Who can appeal and what may be appealed?

The parties to a merger notification may appeal to the NCLAT within a period of sixty days from the date of the decision of the CCI. As per the Competition Act, the Central Government or the State Government or a local authority or enterprise or any person aggrieved by an approval order passed by the CCI can file such an appeal before the NCLAT.