On 4 March 2016 the Indian Ministry of Corporate Affairs (MCA) issued notifications increasing the merger control thresholds by 100% (to those set out in section 5 of the Competition Act, 2002) and extending the "de minimis exemption" while also increasing the thresholds therein.
It may be worth remembering that any acquisition involving assets in India that meet the specified thresholds, even where the purchaser and target are outside India, are required to be mandatorily notified to the Competition Commission of India (CCI) unless exempted or otherwise excluded (acquisitions of shares for "investment purposes" for example ).
Notifications should be made within the prescribed timelines (30 calendar days from the entry into a "binding agreement" in case of acquisitions) and the failure to notify can result in significant fines up to one per cent of the total worldwide turnover or the assets of the combined group (whichever is higher), besides rendering the entire transaction void.
Pursuant to the MCA notifications referred to above, the financial thresholds to determine whether an M&A transaction would require the approval of the CCI are now revised as follows:
Click here to view the table.
* Both the "Direct Parties" and the "Acquiring Group" Tests are to be applied.
**Assets OR Turnover thresholds have to be met.
The "de minimis exemption" has been extended for a period of five years (up to 3 March 2021) and the thresholds therein also increased so that, going forward, Indian merger control rules shall not apply to transactions where the target entity has assets less than INR3.5 billion (USD 52 million approx.) or turnover less than INR10 billion (USD 149 million approx.) in India; which is an increase of INR1 billion and INR2.5 billion respectively.