Competition Commission of India (CCI) (Procedure in regard to the transaction of business relating to combination) Regulation 2011
The Competition Commission of India (CCI) today notified regulations requiring corporates to seek its approval before going in for high value mergers and acquisitions. Only those proposals would need the CCI™s nod where the companies have combined assets of Rs1,000 crore or more, or a combined turnover of Rs3,000 crore or more, as per the Act. Also, the target company™s net assets have to be a minimum of Rs200 crore or it should have a turnover of Rs600 crore for CCI intervention.
The above regulations i.e. Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 shall come into force from 1 June 2011.
The parties would have to submit a fee of up to Rs1 million for getting the CCI approval.
The regulations provide for two forms of merger of clearance:
Form I, which is short form merger clearance under which transactions include (1) acquisitions of not more than 15 percent of the total shares solely for an investment purpose or in the ordinary course of business and which does not lead to a control of the enterprise; (2) acquisitions where the acquirer is already in control of the enterprise; (3) acquisition of assets where the assets of the parties are not directly related to the business activities of the party acquiring or made solely as an investment or in the ordinary course of business and (4) acquisitions taking place within the group. All other merger clearance will be filed under Form II.
The regulation provides that the CCI will issue its prima facie opinion within 30 days of filing of the merger clearance application (the combination to file notice in Form II).
The regulations stipulate the CCI to pass a final order within 180 days of filing the merger clearance application.
