SECTION 1: Overview
1.1 Please provide a brief overview of your jurisdiction's
merger control legislative and regulatory framework.
Competition law in India is governed by the Competition Act,
2002 (the Act) and regulations framed under the Act. The
enforcement agency under the Act is the Competition Commission
of India (CCI).
The merger control provisions under the Act were notified
with effect from June 1 2011, and it provides for a mandatory
and suspensory regime for all notifiable transactions (i.e.
acquisitions, mergers and amalgamations) which meet the
specified asset or turnover thresholds prescriber under the
Act. The notifiable transactions which satisfy the specified
jurisdictional thresholds are known as combinations under the
In addition to the Act, the CCI has framed the CCI
(Procedure in regard to the transaction of business relating to
combinations) Regulations, 2011 (Combination Regulations),
which provide the procedural framework with respect to merger
The failure to report a notifiable combination can attract a
penalty which may extend to one percent of the worldwide
turnover or assets, whichever is higher, on the parties to the
In addition to levying penalties, the CCI also has the power
to declare void/unscramble an unreported combination, if it is
of the view that the combination will have, or will likely to
have, an appreciable adverse effect on competition (AAEC) in
India. The power to declare void/unscramble a combination can
be exercised by the CCI up to one year from the date on which
the combination has taken effect. This limitation period does
not apply in relation to imposing penalties on parties for a
failure to notify a combination to the CCI.
1.2 What have been the key recent trends and developments
in merger control?
The CCI's average review time to assess a notifiable
transaction has reduced to approximately 24 working days in
2017 (until December 2017) from approximately 34 working days
in 2016 – this despite the CCI having limited
resources in the merger control division as compared to its
In June 2017, the CCI issued a guidance note on non-compete
clauses laying down the overall framework and its approach for
the assessment of non-compete restrictions in M&A
transactions. This is a welcome step as around 60% (13 cases)
of all modifications voluntarily offered or imposed by the CCI
(22 cases) pertained to scope and duration of the non-compete
In the same month (June 2017), the Government of India
removed the mandatory 30-day filing deadline for notifiable
transactions to bring India's merger control regime in line
with international best practices.
In order to further streamline the merger regime in India,
the de minimis exemption issued by Government of India
in March 2017, clarified that asset acquisitions would entail
application of de minimis and jurisdictional
thresholds only to the assets and turnover of the relevant
business being acquired and not to the aggregate value of the
seller's entire financials as previously considered. In a
similar vein, the Central Government extended the applicability
of the de minimis thresholds to 'mergers and
amalgamations' and not just to acquisitions –
recognising that the structure of a corporate organisation is
irrelevant to the applicability of the thresholds.
1.3 Briefly, what is your outlook for merger control over
the next 12 months, including any foreseeable legislative
The Government of India and the CCI have made significant
strides with respect to merger control in 2017. The approach
followed by the CCI is indicative of the fact that the CCI will
continue to fine-tune the procedural framework, reduce average
time taken to approve transactions, and consult with the
various stakeholders prior to amending the Combination
Regulations on a periodic basis.
The CCI has played a vital role in constantly fine-tuning
the merger control regime and has been able to address several
teething issues since its inception in 2011. However, one key
change which remains on the industry's wish list to be
addressed by the CCI, is the right of a hearing before the CCI
proceeds to invalidate a merger notification – which
it currently can, and does, without providing the notifying
parties of an opportunity of being heard.
SECTION 2: Jurisdiction
2.1 What types of transactions are caught by the rules?
What constitutes a merger and how is the concept of control
All combinations, subject to certain specific exemptions
under the Act and the Combination Regulations, are notifiable.
Provided that the prescribed thresholds for assets or turnover
are satisfied, the following types of combinations are covered
under the Act:
- an acquisition of control, shares, voting
rights or assets of one or more enterprises;
- an acquisition of control by a person over
an enterprise where such person already has control over
another enterprise engaged in engaged in production,
distribution or trading of similar or identical or
substitutable goods or provision of similar or identical or
substitutable services; and
- a merger or amalgamation between or
The Act defines control to include controlling the affairs
or management by: one or more enterprises, either jointly or
singly, over another enterprise or group; one or more groups,
either jointly or singly, over another group or enterprise.
The CCI, by way of its decisional practice, has interpreted
control to mean the ability to exercise control over the
management or affairs and strategic commercial decisions of an
enterprise. Such control may be exercised by way veto rights
attached to minority shareholding, contractual covenants, or
A pure greenfield joint venture (JV) is not notifiable given
the de minimis exemption issued by the government of
India. However, a brownfield JV, where the JV partner(s) is
contributing assets (such as, customer contracts, machinery
etc) would be notifiable if the jurisdictional thresholds are
satisfied. There is no guidance from the CCI with respect to
the differentiation in treatment of full-functional JV from
It is to be noted that a share subscription or financing
facility or acquisitions by financial institutions, pursuant to
any covenant of a loan or investment agreement, which breach
the thresholds are not required to be notified to the CCI for
its prior approval but are required to be intimated post
consummation (see Section 3).
2.2 What are the jurisdictional thresholds for
notification? Can the authorities investigate a merger falling
below these thresholds?
If any of the below-mentioned thresholds are exceeded, the
combination will require a prior approval from the CCI.
The notifying parties have combined assets in India of INR20
billion ($315 million) or combined turnover in India of INR60
The notifying parties have combined worldwide assets of $1
billion including combined assets in India of INR10 billion or
combined worldwide turnover of $3 billion including combined
turnover in India of INR30 billion.
The group has assets in India of INR80 billion or turnover
in India of INR240 billion.
The group has worldwide assets of $4 billion including
assets in India of INR10 billion or worldwide turnover of $12
billion including turnover in India of INR30 billion.
The CCI cannot investigate a transaction which does not
breach the jurisdictional thresholds and therefore does not
qualify as a combination under the Act.
2.3 Are foreign-to-foreign transactions caught by the
rules? Is a local effect required to give the authority
jurisdiction to review it?
There is no exception for foreign-to-foreign transactions,
and so long as the jurisdictional thresholds are exceeded, the
combination will require the prior approval of the CCI. The
local nexus test is met if the target exceeds the Indian assets
and turnover thresholds specified in the de minimis
thresholds, and the parties on a combined basis exceed the
jurisdictional thresholds which also contain minimum Indian
asset or turnover requirements.
The Combination Regulations earlier provided a relaxation
for combinations taking place entirely outside Indian with
insignificant local nexus and effects on markets in India, but
this relaxation was done away with in May 2014.
The Act provides jurisdiction to the CCI for any acts taking
place outside India, including a combination taking place
outside India, if such combination has or is likely to have an
AAEC in India.
SECTION 3: Notification
3.1 When the jurisdictional thresholds are met, is a filing
mandatory or voluntary? What are the risks/sanctions for
failing to notify a transaction and closing prior to
The filing of a merger notification for a combination is
mandatory as well as suspensory, ie the combination cannot be
consummated without the receipt of approval from the CCI.
The Act provides for a self-assessment regime to determine
the form of the merger notification to be filed with the CCI
based on the market shares of the combining parties. A
combination may be notified to the CCI in short form (Form I)
or long form (Form II). Form II is preferably required to be
filed when: the combined market shares of notifying parties,
who are competitors, is more than 15% in the relevant market;
or the combined market share of the notifying parties, who
operate in vertically linked markets, is more than 25% in
either the upstream or the downstream market.
The CCI reviews information in the public domain for those
transactions which ought to have been notifiable under the Act
but did not seek CCI's prior clearance. In such cases, the CCI
issues a show cause notice to parties asking for details about
their financials and transaction documents, in order to
ascertain whether the transaction benefitted from any
relaxation or was a case of gun-jumping.
The failure to report a notifiable combination can attract a
penalty which may extend to one percent of global turnover or
assets, whichever is higher, on the parties to the combination.
In addition to levying penalties, the CCI also has the power to
declare void/unscramble an unreported combination, if it is of
the view that the combination will have, or will be likely to
have, an AAEC in India.
Separately, a share subscription or financing facility or
any acquisition, by a public financial institution, foreign
institutional investor, bank or venture capital fund, pursuant
to any covenant of a loan agreement or investment agreement,
which breaches the thresholds is required to be filed within
seven days of consummation of the transaction. In other words,
no prior approval is required for such transactions and only
information regarding the transaction needs to be provided in
the specified form (Form III).
3.2 Who is responsible for filing? Do filing fees
The party responsible for filing in case of an acquisition
(of shares, control, voting rights or assets) is the acquirer.
In case of a merger or amalgamation, the parties to the merger
need to jointly file the merger notification with the CCI.
The statutory filing fees for a short form filing (Form I)
is INR1.5 million, whereas the statutory filing fees for a long
form filing (Form II) is INR5 million. There is no filing fee
for Form III.
3.3 Is there a deadline for filing? What are the filing
requirements and how onerous are they?
The 30-day filing deadline was removed by the government of
India in June 2017. The notifying parties have the discretion
to file the merger notification at any time prior to
In terms of the information required, even the short form
(Form I) requires the notifying parties to provide significant
data up-front, including details of the relevant market,
details pertaining to the upstream and downstream markets,
details of the five largest competitors, five largest suppliers
and five largest customers. Further, the short form requires
the notifying parties to provide information at group level in
terms of overlaps in the relevant market. In this regard,
notifying parties are required to provide an overview of the
business activities of the party in India, as well as a broad
description on a worldwide basis. Additionally, the notifying
parties would also need to disclose, if they have any direct or
indirect shareholding and/or control over other enterprises
that are engaged in similar activities as the notifying
A long form merger notification is 40-60% more onerous than
a short form, requiring additional details in terms of the
financial details, market information (such as, distribution
channels and service networks), level of concentration in the
market, costs in terms of research and development, details of
imports and exports, price lists of the last three years,
economic rationale of the transaction and the like. The CCI
typically expects an economist report to be provided in case of
a long form filing.
Form III notifications are required to be filed within seven
days from the consummation of the transaction. The Form III
requires details of the transaction including the details of
control, the circumstances for exercise of such control and the
consequences of default arising out of such loan agreement or
3.4 Are pre-notification contacts available, encouraged or
required? How long does this process take and what steps does
The parties to a potential transaction can seek guidance
from the CCI by requesting a pre-filing consultation, including
review of draft merger notification.
The request for a pre-filing consultation is to be provided
in prescribed format and sent via e-mail, and is usually
granted within a week. The pre-filing consultation is typically
provided in a physical meeting and the views provided by the
CCI are not binding.
SECTION 4: Review process and timetables
4.1 What is the standard statutory timetable for clearance
and is there a fast-track procedure? Can the authority extend
or delay this process? What are the different steps and phases
of the review process?
The Act provides for an outer limit of 210 calendar days for
the CCI to review a notified combination, failing which the
combination is deemed to be approved. There CCI does not have
any facility to fast track a merger filing.
Phase I review
The CCI is required to provide a prima facie
opinion on whether a proposed transaction will cause or is
likely to cause an AAEC in the relevant market in India within
30 working days of filing the merger notification (excluding
clock stops). The 30-working day timeline is not absolute as
the CCI can 'stop the clock' and seek additional information
from the notifying parties, and the time taken by the parties
to submit such information is excluded from the 30-working day
The 30-working day review period can be extended further by
another 15 working days, each, in the event the CCI calls for
further information from third parties or there is a voluntary
commitment by the notifying parties at the end of the phase I
Phase II review
Where the CCI is of the opinion that a combination notified
to the CCI, has or is likely to have an AAEC, it can subject
the merger notification to an in-depth investigation process
(which lasts a further 180 days). Parties cannot consummate the
combination, including parts of the combination, until the CCI
approves the combination at the end of the Phase II process.
Note that Form I merger notifications can also be subjected to
a phase II investigation.
Typically, a no-issues short form (Form I) is cleared within
two calendar months and a long form (Form II) is cleared within
three to four calendar months.
4.2 What is the substantive test for clearance? What are
the theories of harm the authorities will investigate? To what
extent does the authority consider efficiencies arguments?
The substantive test for assessing a combination is whether
the combination will cause or be likely to cause an AAEC in the
relevant market in India. In order to determine whether a
combination will have or be likely to have an AAEC, the CCI may
consider all or any of the following factors stated in Section
20(4) of the Act:
- actual and potential level of competition
through imports in the market;
- extent of barriers to entry in the
- level of combination in the market;
- degree of countervailing power in the
- likelihood that the combination would
result in the parties to the combination being able to
significantly and sustainably increase prices or
- profit margins;
- extent of effective competition likely to
sustain in a market;
- extent to which substitutes are available
or are likely to be available in the market;
- market share, in the relevant market, of
the persons or enterprise in a combination, individually and
as a combination;
- likelihood that the combination would
result in the removal of a vigorous and effective competitor
or competitors in the market;
- nature and extent of vertical integration
in the market;
- possibility of a failing business;
- nature and extent of innovation;
- relative advantage, by way of the
contribution to the economic development, by any combination
having or likely to have an AAEC; and
- whether the benefits of the combination
outweigh the adverse impact of the combination, if any.
The CCI principally assesses whether the proposed
combination will lead to co-ordinated effects – as
there is one less player in the market; or unilateral effects
– where the merged enterprise has the ability to raise
prices above competitive levels. The CCI also employs certain
screening tests such as the Herfindahl-Hirschman index,
Elzinga-Hogarty test, concentration ratio and gross upward
pricing pressure index while making its competition
As regards efficiency arguments put forward by the notifying
parties, the CCI has indicated that the efficiency must be
specific to the combination and resulting from it. The CCI will
not accept broad claims of synergies and efficiencies created
by the combination.
4.3 Are remedies available to address competition concerns?
What are the conditions and timing issues applicable to
Several notifying mergers have offered voluntary commitments
to avoid a phase II investigation. As mentioned above, there
have been several voluntary modifications with respect to the
scope and duration of non-compete. The CCI has shown a
preference for structural remedies over behavioural remedies,
as it cannot monitor behavioural for the most part.
SECTION 5: Judicial review
5.1 Please describe the parties' ability to appeal merger
control decisions and the time-limits applicable. What is the
typical time-frame for appeals.
The appeals for decisions of the CCI lies with the National
Company Law Appellate Tribunal, which replaced the erstwhile
Competition Law Appellate Tribunal. Third parties seeking to
appeal merger control orders of the CCI must establish
locus standi and there is a 60-day time limit for
filing an appeal against the merger control orders. There have
been very few appeals in relation to merger control orders,
with most combinations being approved without any intervention
from the CCI. Typically, appeals take up to a year to get
Nisha Kaur Uberoi
Partner & national head of
competition law practice
T: +91 91671 27599
F: +91 22 4079 1098
Nisha Kaur Uberoi is a partner and the national head
of the competition law practice at Trilegal, where she
leads one of the largest competition law teams in
Uberoi advises on a full range of competition
matters, including cartel enforcement, abuse of
dominance, leniency applications, merger control,
competition law audit and compliance. She represents
clients in cartel investigations as well as abuse of
dominance proceedings and regularly appears at the
Competition Commission of India (CCI), the National
Company Law Appellate Tribunal (NCLAT) and the Supreme
Court. Uberoi is currently the lead lawyer on the
alleged cement cartel case, where she is representing
ACL, a LafargeHolcim company, in which the cement
companies were penalised approximately $1.6 billion by
the CCI. She is currently defending companies in
alleged cartels across several sectors, including inter
alia, the tyre, cement, auto-parts and shipping liner
Uberoi has obtained a significant number of merger
control clearances in India (200 of an approximate
total of 497 merger notifications). She also advised on
India's first two Phase II investigations involving
divestitures. She recently obtained an unconditional
approval on the Idea Cellular and Vodafone merger.
Nisha currently serves as India's Non-Governmental
Advisor for the International Competition Network.