The Competition Act (2002), amended in 2007 (the act), targets anti-competitive agreements or arrangements, abuse of dominance, and combinations. After many years in limbo, the reconstituted Competition Commission of India (CCI) was finally empowered from 20 May to inquire into and regulate anti-competitive agreements and abuse of dominance. Given that the provisions of the act dealing with combinations are yet to be notified, a move may be underway to lessen the rigidity by taking into account the typical change in transaction sizes in the last three to four years.
Under the act an acquisition, merger or amalgamation of one or more enterprises by one or more persons, who jointly meet stipulated combined asset/turnover criteria (either wholly within or both within and outside India) constitutes a combination.
An acquisition where the acquirer and the enterprise being acquired jointly meet the prescribed asset/turnover criteria must be notified to the CCI within 30 days of the execution of any agreement for acquisition (including informal and non-binding agreements). The CCI is allowed 210 days to evaluate the proposed combination and determine if it could be capable of causing “an appreciable adverse effect on competition within India”.
Anahita Irani is a senior associate at Juris Corp. The firm is a full-service law firm based in Mumbai and specializes in financial transactions including capital markets and securities, banking, corporate restructuring and derivatives.
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