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.
A. 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):
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Unless exempted or excluded otherwise, all combinations meeting the above thresholds are mandatorily required to be sought approval of the CCI before consummation.
B. TARGET EXEMPTION REVISED AND EXTENDED-Through another Notification, the Central Government has increased the 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.
C. 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.