When India’s two largest multiplex chains – PVR and Inox Leisure – merged in March 2022, the antitrust watchdog was helpless. The blockbuster deal managed to sidestep regulatory scrutiny because the turnover fell below the notifiable threshold of INR10 billion (USD120 million).
In September, the Competition Commission of India (CCI) has instead proposed a deal value threshold as an additional criterion for notifying M&A transactions as it overhauled the merger regulations under the newly introduced Competition (Amendment) Act, 2023.
Deals above INR20 billion will be scrutinised by the antitrust watchdog under the new criterion. Targets with substantial business operations based on turnover, gross merchandise value in India exceeding 10% of the global figure, or number of users, must be notified.
India will now follow developed countries like the US, Germany, Austria, and South Korea in implementing deal value thresholds. It will capture high-profile transactions that often escape regulatory scrutiny due to the small target size under the de-minimis target exemption.
Facilitating parties to acquire shares from stock exchanges without facing gun-jumping penalties, the CCI plans to introduce standstill obligations for takeovers. The draft regulations propose shortening merger review timelines from 210 to 150 days, and the CCI is required to form an initial opinion on M&A transactions within 30 days.
However, merger filing fees will increase by 50%, from INR2 million to INR3 million, for Form I merger filings, and from INR6 million to INR9 million for Form II merger filings.