When does a merger or acquisition require CCI approval under the Competition Act merger control rules?

Question

My company is planning an acquisition and I want to know the asset and turnover thresholds that trigger mandatory notification to the Competition Commission. I would rather settle this without going to court if the law allows it, but I need to know my rights before I sign anything. Please tell me what to do first and what document to keep.

MyVakeel Legal Desk · Accepted Answer

Under Indian law, Competition Act 2002, Section 5 is the starting point for this corporate law question. What follows is the position in substance, together with the steps that usually make the difference in practice.

Section 5 defines a 'combination' by reference to specified asset and turnover thresholds for the parties involved, calculated on a standalone or group basis, which are periodically revised by government notification and must be checked at the time of the transaction.

Section 6 requires that a combination meeting the notifiable thresholds shall not take effect until the Competition Commission of India approves it, and mandates that notice of the proposed combination be given before consummation, subject to certain exempt categories such as those covered by the de minimis or small target exemption.

The Commission examines whether the combination is likely to cause an appreciable adverse effect on competition in the relevant market, considering factors such as market concentration, actual and potential competition, and entry barriers.

Section 43A imposes a penalty for failure to notify a notifiable combination or for consummating it before approval, which can extend up to one percent of the total turnover or assets of the combination, whichever is higher.

Recent amendments have also introduced a deal value threshold for transactions exceeding a specified value where the target has substantial business operations in India, expanding the scope of transactions requiring notification.

In practice, in this order: 1) Calculate combined asset and turnover figures of the parties against the current notified thresholds; 2) Check applicability of the deal value threshold if the transaction value exceeds the prescribed limit; 3) File Form I or Form II notice with the Competition Commission of India before consummating the transaction if thresholds are met; 4) Consult competition counsel to assess exemption eligibility and prepare the notification.

Timing matters here: Competition Act 2002, Section 5 works on limitation periods, so a cci merger notification thresholds claim that is right on the merits can still fail if it is brought late. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in corporate law.