Combination regulation in India

Sections 5 & 6 of the Competition Act, 2002 introduced merger or combination regulation in India. A combination is an acquisition of one or more enterprises by one or more persons, merger or amalgamation of enterprises, if it meets the prescribed monetary thresholds mentioned as prescribed under the Act. it involves:

  • Any acquisition of control, shares, voting rights or assets of an enterprise;
  • Any acquisition of control by a person over an enterprise, where such person already has direct/indirect control over another enterprise in similar business;
  • Any merger or amalgamation of enterprises.

The Competition Act. 2002 has laid down certain monetary thresholds, Any combination above the defined monetary thresholds requires filing and prior approval of the Competition Commission of India. The Competition Commission of India is to be notified regarding the combination within a period of 30 days of the following:

  • Board approval of the enterprises in case of proposed merger/amalgamation; or
  • Execution of any agreement or ‘other document’ in case of a proposed acquisition.

The monetary thresholds for the joint assets/turnover are presented in the form of a table below:

In India

APPLICABLE TO

ASSETS

TURNOVER

Individual Parties

INR 1,500 Cr.

INR 4500 Cr.

Group

INR 6,000 Cr.

INR 18,000 Cr

In India and out side India

ASSETS

TURNOVER

TOTAL

Minimum Indian component out of TOTAL

TOTAL

Minimum Indian component out of TOTAL

Individual Parties

$ 750 m

INR 750 cr

$2250 m

INR 2250 cr

Group

$3,000m

INR 750 cr

$9000m

INR 2250 cr

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