CCI introduces Leniency “Plus” regime in India- Will it suffice?
The Ministry of Corporate Affairs, Govt. of India has made important revisions to the merger control regime in India. The following three Notifications were published in the Gazette of India on March 4, 2016.
- THRESHOLDS FOR NOTIFICATION REVISED– Through the first Notification, the Central Government has increased thresholds, both assets and turnover, for any transaction to qualify as a combination under Section 5 of the Competition Act, 2002 (“Act”)by 100%. Consequently, the following shall be the revised thresholds under the Act to trigger the filing requirement for any transaction before the Competition Commission of India (CCI):
Threshold for proposed combination (acquirer + target) Threshold for group post acquisition In India In or outside India In India In or outside India Assets Assets Assets Assets Jointly worth more than INR 2,000 Crores (INR 20 billion) Jointly worth more than USD 1000 million (including assets worth at least INR 1000 Crores (INR 10 billion) in India) Jointly worth more than INR 8,000 Crores (INR 80 billion) Jointly worth more than USD 4 billion (including assets worth at least INR 1000 Crores (INR 10 billion) in India) Turnover Turnover Turnover Turnover Jointly worth more than INR 6,000 Crores (INR 60 billion) Jointly worth more than USD 3.50 billion (including at least INR 3,000 Crores (INR 30 billion) in India) Jointly worth more than Rs 24,000 Crores (INR 240 billion) Jointly worth more than USD 12 billion (including at least INR 3000 Crores (INR 30 billion) in India) Unless exempted or excluded otherwise, all combinations meeting the above thresholds are mandatorily required to be sought approval of the CCI before consummation.
- TARGET EXEMPTION REVISED AND EXTENDED-Through another Notification, the Central Government has increased the thresholds limits for the target exemption. The exemption is now available to those transactions where the assets of the target enterprise (whose control, shares, voting rights or assets are being acquired) are not more than rupees three hundred and fifty Crores OR the turnover of the target enterprise(whose control, shares, voting rights or assets are being acquired) is not more than rupees one thousand Crores. The exemption, colloquially referred to as the “Target Exemption”, shall be applicable for a further period of five years from March 4, 2016.
- EXEMPTION FOR “GROUP” EXTENDED-Through a third notification, the Central Government has extended the exemption to a ‘Group’ exercising less than fifty per cent of voting rights in other enterprise from the provisions of Section 5 of the Act. The said exemption shall be applicable for a further period of five years from March 4, 2016.
Suggested Reading: (i) CCI further amend Combination Regulations
(II) Economics of Exemptions from Competition Law
(iii) How mergers affect competition
(iv) Are Merger Regulations effective
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