CCI Frequently asked Questions on Combinations

The Competition Commission of India (CCI) provides a comprehensive set of Frequently Asked Questions (FAQs) to guide stakeholders on “Combinations,” essentially mergers and acquisitions (M&As), and their jurisdictional thresholds under the Competition Act, 2002. Not all M&A activities necessitate notification to the CCI; only those classified as “combinations” under Section 6(2) of the Act require prior approval. A transaction qualifies as a combination if it meets specific asset, turnover, or value of transaction thresholds outlined in Section 5 of the Act. However, a “De-Minimis Exemption” exists, excluding smaller transactions from this requirement if the acquired entity’s assets or turnover in India fall below a prescribed value. The scope of Section 5 extends to acquisitions of control, shares, voting rights, or assets, as well as mergers and amalgamations, with thresholds applied at both enterprise and group levels, considering geographical business operations. These thresholds, subject to biennial review by the Central Government, are crucial for determining whether an M&A must undergo the CCI’s scrutiny to prevent anti-competitive impacts.

A. Combination and Jurisdictional Thresholds

Q.1 Are all M&As required to be notified to the Commission?

Ans. Ms. Not every Merger and Acquisition (M&A) activity requires notification to the Commission. As per Section 6(2) of the Competition Act, 2002 (Act) only combinations require notification and approval of the Commission prior to their consummation, La, coming into effect even partially.

Q.2 What Is meant by a combination?

Ans. Ms. M&As that meet either asset, turnover, or value of transaction thresholds prescribed under Section 5 of the Act are termed as combinations. Thus, only M&As that meet the assets or turnover, or value of transaction thresholds prescribed under Section 5 of the Act require notification to and approval of the Commission prior to their consummation. However, as per Section 5(e) crf the Act, where either the value of assets or turnover of the enterprise being acquired, taken control of, merged or amalgamated in India Is not more than such value’ as may be prescribed, such acquisition, control, merger or amalgamation, shall not constitute a combination (De-Minimis Exemption).

Q.3 What Is the scope of Section 5 of the Act?

Ans. As per Section 5 of the Ad, the acquisition of one or more enterprises by one or more persons or the merger or amalgamation of enterprises, shall be considered a combination if it exceeds the prescribed thresholds. However, as per Section 5(e) of the Act, where either the value of assets or turnover of the enterprise being acquired, taken control of, merged or amalgamated in India is not more than such value as may be prescribed, such acquisition, control, merger or amalgamation, shall not constitute a combination.

The thresholds are based on assets, turnover, and value of transaction. Under the Act, acquisition means directly or indirectly acquiring or agreeing to acquire (i) control, shares, voting rights, or assets of any enterprise; or (II) control over management or control over assets of any enterprise. The prescribed thresholds based on assets and turnover are applicable to the parties to a particular combination i.e., target enterprise and acquirer (or acquirer group)lmerging parties (or the group to which merged entity would belong) or the value of assets and turnover of the group to which the parties belong, and the other newly introduced threshold is based on value of transaction. Furthermore, the thresholds also take into account the geographical limits of parties’ business operations.

Q.4 What are the threshold values prescribed under Section 5 of the Act?

Ans. The thresholds are based on the assets, turnover of the parties to the combination and value of transaction. The assets and turnover thresholds are at enterprise-level and at group level Le. the group to which the target would belong after the M&A. The threshold also takes into account the geographical limits as to the operation of the business. Section 20(3) of the Act provides for a biennial review of these thresholds’ by the Central Government The thresholds at present are as follows:

TABLE 1

Threshold under Section 5 of the Act
Level	Geography	Combined Assets		Combined Turnover
Enterprise Level	India	More than INR 2500 Crore	OR	More than INR 7500 Crore
	Worldwide (with Ind la Component)	More than USD 1.25 billion wtth at least INR 1250 crore in India		More than USD 3.75 billion with at least INR 3750 crore In India
OR
Group Level	India	More than INR 10000 Crore	OR	More than INR 30000 Crore
	Worldwide (with India Component)	More than USD 5 billion with at least INR 1250 aura in India		More than USD 15 billion with at least INR 3750 crore in India
OR
Value of Transaction	More than INR 2000 Crore. Provided that the target, in case of Acquisition, and Merging or Amalgamating entities, in case of merger or amalgamation, have substantial business operations in India (SBOI). Thresholds for SBOI are given in Regulation 4(2) of Combinations Regulations, 2024. [Please also refer to O. No 35 which is also relevant for inference of SB01]

Q.5 For terming an M&A a Combination, should all the thresholds mentioned In Table 1 besatisfied?

Ans. No. Upon satisfaction of even one threshold prescribed under Section 5 of the Act, M&A is called a combination forthe purpose of theAd.

Q.6 Under the enterprise-level thresholds, which are the enterprises whose assets and turnover are considered for testing of thresholds prescribed under Section 5 of the Act?

Ans. For the purpose of testing enterprise-level thresholds in terms of assets and turnover, the enterprises whose assets and turnover are considered for the testing of thresholds prescribed underSection 5 of theAct are as given in the table:

TABLE 2

In case of an acquisition	Assets and turnover, as the case may be, of the parties to the acquisition, vfz., the acquirerand thetargetare considered.
In case of merger or amalgamation	Assets and turnover, as the case may be, of the enterprise remaining after merger or the enterprise created as a result of the amalgamation are considered. Thus, the combined value of assets and turnover of the merged or amalgamated entities are considered .
In case of acquiring of control by a person over an enterprise when such person	Assets and turnover, as the case may be, of the enterprise over which control has
already has direct or indirect control Over	been acquired along with the enterprise
another enterprise engaged in	overwhichtheacquireralreadyhasdirect
production, distribution or trading of a similar or Identical or substitutable goods or provision of a similar or Identical or substitutable service.	or indirectcontrol are considered.

Q.7 Under the group-level thresholds, what are the enterprises whose assets and turnover are considered for testing of threshold prescribed under the Section 5 of the Act?

Ans. Ms. For the purpose of testing group-level thresholds In terms of assets and turnover, the group whose assets and turnover are considered for the testing of thresholds prescribed under Section Sof the Act are as given in the table:

TABLE 3

In case of an acquisition	Assets and turnover of the group to which the target would belong after the acquisition and the group starting from the acquired enterprise are considered.
In case of merger or amalgamation	Assets and turnover of the group to which the enterprise remaining after the merger or the enterprise created as a result of the amalgamation would belong after the merger or the amalgamation, as the case maybe.
In case of acquiring of control by a person over an enterprise when such person already has direct or indirect control over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or provision of a similar or Identical or substitutable service	Assets and turnover of the group, to which enterprise whose control has been acquired or is being acquired, would belong after the acquisition and the group starting from the acquired enterprise are considered.

Q.8 What Is meant by an acquisition?

Ans. Ms. Section 2(a) of the Act defines acquisition to mean, directly or Indirectly, acquiring or agreeing to acquire shares, voting rights or assets, control over management or control over assets of any enterprise.

Q.9 What is meant by a merger or amalgamation?

Ans. Ms. The Act does not specifically define merger or amalgamation. Merger is largely understood to mean where assets and liabilities of an entity are transferred to another entity and the first entity loses its existence. Amalgamation is largely understood to mean where two or more existing entitles merge to form a new entity and existing entitles lose their existence.

Q.10 What is meant by shares?

Ans. Ms. Section 2(v) of the Act defines shares to mean shares in the share capital of a company carrying voting rights and includes: (i) any security which entities the holder to receive shares with voting rights; (ii) stock except where a distinction between stock and share is expressed orImplied.

Q.11 What is meant by group?

Ans. Ms. Explanation (b) to Section 5 of the Ad provides that a group means two or more enterprises where one enterprise Is directlyor indirectly, In a position to: (I) exercise 26% or such other higher percentage as may be prescribed, of the voting rights in the other enterprise; or (11) appoint more than 50% of the members of the board of directors In the other enterprise; or (iii) control the management or affairs of the other enterprise.

Q.12 What is meant by control?

Ans. Ms. As per Explanation (a) to Section 5 of the Act, ‘control’ means the ability to exercise material influence, in any manner whatsoever, over the management or affairs or strategic commercial decisions by— (i ) one or more enterprises, either jointlyor singly, over another enterprise or group; (ii) one or more groups, either jointly or singly, over another group or enterprise.

Q.13 What are the different factors for determining the ability to control?

Ans. Ms. The ability to control the management and affairs of an enterprise may be Inferred from the extent of shareholding/voting rights and/or contractual rights such as affirmative rights, consultation rights, rights allowing participation in management and affairs and/or the de facto operational dynamics.

Q.14 Is there any prescribed threshold of shareholding/voting rights for presumption of control?

Ans. Yes, In terms of extent of shareholding/voting rights, sharehoiding Noting rights held by one or more enterprises belonging to the same group, constituting more than 25 percent of the total shares, or voting rights of the other enterprise raises presumption of control.

Q.15 What types of affirmative rights are relevant for determination of control?

Ans. Ms. As affirmative rights confer the veto power in respect of decisions and therefore the enterprise which has contractually agreed to provide affirmative rights Is required to seek prior approval over the decisions on which affirmative rights are agreed. These rights operate Independently of the shareholding thresholds relevant for presumption of control and therefore an enterprise posRPs.sing such rights may potentially control other enterprise/group irrespective of the extent of shareholding. However, the subject matter of veto rights/affirmative rights Is relevant to differentiate between control conferring rights and investor protection rights.

Q.16 What type of rights are considered as control conferring?

Ans. Control conferring rights Include affirmative rights which confer the ability to influence the outcome on policy and commercially strategic matters. Asa thumb rule, any right which relate to operational aspects of an enterprise is commercially strategic. The other rights relating to financing and investments etc. may also be control conferring if such rights may potentially Influence the operational position of an enterprise.

An illustrative list of rights which raise presumption of control is as follows:

a. Appointment/removal of senior management personnel;

b. Approval of the budget;

c. Approval of business plans;

d. Alteration of charter documents , the memorandum of association and articles of association which directly/indirectly affects the day-to-day operational dynamics; and

e. Any right relating to operational parameters , Research & Development, manufacturing, marketing, general day to day ad mi nistration etc.

Q.17 What Is the scope of “consultation rights, rights allowing participation in managementand affairs andlor the do facto operational dynamics”.

Ans. Ms. There may be certain situations in which an enterprise may not have the ability to control the other enterprise in terms of shareholding and/or affirmative rights and the contractual arrangements may only provide It with an opportunity to participate In management. Even in such situations, depending on the facts of a case, such an enterprise may be able to Influence the strategic commercial decisions In de facto terms. The da facto control, however, is not a matter of presumption but rather a matter of determination.

Q.18 What type of rights are generally not considered as control conferring?

Ans. An indicative list of rights which ordinarily will not lead to any presumption of control Is as follows:

a. Information rights;

b. Tag along rights;

c. Right to ensure that the amount of Investment made by the acquirer Is utilised In accordance with the agreed contractual terms Of agreed business plan;

d. Exit rights (including the timelines and price ) both in the event of default or in ordinary course as per the terms of agreement;

e. Rights aimed at providing anti-dilution price protection forsubsequent issue of shares;

f. Rights which restrict transfer of shares to a particular person/enterprise identified in the agreement; and

g. Alteration of charter documents viz., the memorandum of association and articles of association as regards adverse changes in other rights of the investor which are agreed between the parties.

Q.19 Can there be an Inference of control In absence of any contractual arrangements?

Ans. Ms. Yes, the ability to control an enterprise in de facto terms can also be inferred in situations where there are no contractual arrangements. To Illustrate, while lacking control over majority of the composition of directors, an enterprise can still be considered to have the ability to control in situations where the director(s) nominated possess the expertise, status etc. which allow demonstrated ability to influence the other members thereby gaining ability to influence strategic corn rnercial behaviour. Similarly, in case of an enterprise holding the largest and significant block of shares with remaining shareholding being dispersed may have the ability to influence the strategic policy outcomes even in absence of any contractual arrangements. In such situations, control Inference may be drawn.

Q.20 Whether the right to a single board or observer seat necessarily and In all cases means material Influence, and hence control?

Ans. Ms. An observer seat does not imply material influence over the affairs of the target enterprise. A single or multiple board seats (falling short of majority composition of board of directors) may Imply material Influence In certain cases which as discussed above (Ms. to Q. No 19) are relevant for inference of de facto control.

Q.21 Does the ‘change In control’ under the Competition (Criteria for Exemption of Combinations) Rules, 2024 refer to the change In quality/degree of control or change from joint to sole controUsole to joint control?

Ans. Ms. ‘Change In control’ as used In the Competition (Criteria for Exemption of Combinations) Rules, 2024 (Exemption Rules) denotes all situations involving change in quality/degree of control. Accordingly, It also covers situations of Joint-to-joint control and not necessarily instances ofjoint to sole/sole to joint control.

Q.22 How is change in the degree/qual Ity of control ascertained?

Ans. Ms. The phrase ‘quality of control’ refers to change In controlling arrangements Inter se between the same set of shareholders and within the same shareholding thresholds relevant for inference of control.

The phrase ‘degree of control’ refers to change In shareholding In terms of shareholding thresholds, substantial change in rights which change the nature of control from negative to positive control, change In control caused by exit of a controlling shareholder/entry of a new controlling shareholder.

Q.23 Whether the definition of ‘group’ extends to companies over which an entity exerts ‘material’ influence’ even though the test of shareholding (above 26 percent) and (right to appoint majority of the Board) are not met? For example: if A acquires shares of B, would the calculation of consolidated assets and turnover for A and B also include all companies that are materially influenced by A and B even though there is no 26 percent or higher shareholding or the right to appoint the majority of the Board?

Ans. Ms. Yes, because in terms of Explanation (b) to the Section 5 of the Act, group Inter afia means two or more enterprises where one enterprise Is directly or Indirectly In a position to control the management or affai rs of the other enterprise and as per Explanation (a)to Section 5 of the Act, ‘control” means the ability to exercise material influence in any manner whatsoever […].

If A acquires shareholding in B, for examining whether the group level thresholds are satisfied or not, the assets and turnover of entities that are under material influence of A and B shall also be considered even though none of the other two limbs of the definition of group is satisfied.

Q.24 For the purpose of determining whether an M&Atransactlon meets the thresholds prescribed underSection 5 of the Act, financials statements of which year are to be considered?

Ans. Ms. Explanation (e) to Section 5 of the Act provides that the value of assets shall be determined by taking the book value of the assets as shown, in the audited books of account of the enterprise, In the financial year immediately preceding the financial year in which the date of proposed combination falls. If such financial statement has not yet become due to be filed with the Registrar of Companies under the Companies Act, 2013, then as per the statutory auditor’s report made on the basis of the last available audited accounts of the company in the financial year immediately preceding the financial year in which the notice Is filed under su Li-section (2) or sub-section (4) of Section 6 of the Act.

In case of turnover, as per explanation (e) to Section 5 of the Act, the turnover shall be certified by the statutory auditor on the basis of the last available audited accounts of the company In the financial year immediately preceding the financial year In which the notice is filed under su b-section (2) or sub-section (4) of Section 6 of the Ad.

Q.25 Which year Is considered the financial year In which the date of the proposed mergerfalls?

Ans. Ms. For the purpose of explanation (e) to Section 5 of theAct and De-Minimis Exemption, the financial year in which the date of proposed combination falls Is understood as the financial year in which:() the proposal relating to merger or amalgamation was approved by the board of directors of the enterprises concerned; or (i) any agreement or other document for acquisition was executed. In this context, “other document’ means any document, by whatever name called, conveying an agreement or decision to acquire control, shares, voting rights or assets or If the acquisition Is without the consent of the enterprise being acquired, any document executed by the acquiring enterprise, by whatever name called, conveying a decision to acquire control, shares or voting rights or where a public announcement has been made in accordance with the provisions of the Securities and Exchange Board of India (Su bistantialAcq u isttion of Shares and Takeovers) Regulations, 2011 made under the Securities and Exchange Board of India Act, 1992 for acquisition of shares, voting rights or control, such public document.

Q.26 When a portion, a division or a business of an enterprise is being acquired, should the value of total assets and turnover of the seller enterprise or the value of assets and turnover of the portion/division or business be considered for the purpose of determining if the acquisition is a Combination?

Ans. Ms. The De-Minimis Exemption provides that, where a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated with another enterprise, the value of assets or turnover or value of transaction as may be applicable, of the said portion or division or business attributable to it, is to be taken into account for the purpose of calculating Jurisdictional thresholds.

Thus, when a portion, division or business of an enterprise is being acquired, the value of assets and turnover of the said portion or division or business attributable to it or value of the transaction, as may be applicable, is to be considered for the purpose of Section 5 and De-Minims Exemption.

The value of the said portion or division or business shall be determined by taking the book value of the assets as shown in the audited books of accounts of the enterprise In the financial year immediately preceding the financial year in which the date of the proposed combination falls. If such financial statement has not yet become due to be filed with the Registrar of Companies under the Companies Act, 2013, then as per the statutory auditor’s report made on the basis of the lastavailable audited accounts of the company in the financial year immediately preceding the financial year in which the notice is filed under sub-section (2) or sub-section (4) of Section 6 of the Act, as reduced by any depreciation, and the value of assets shall include the brand value, value of goodwill or value of copyright, patent, permitted use, collective mark, registered proprietor, registered trade mark, registered user, homonymous geographical indication, geographical indications, design or layout design or similar other commercial rights under the laws provided in sub­section (5) of Section 3.

In case of turnover, the turnover shall be certified by the statutory auditor on the basis of the last available audited accounts of the company in the financial year immediately preceding the financial year in which the notice is filed under sub-section (2) or sub-section (4) of section 6 of the Act

Q.27 What may be done when the target’s financial statements have not been audited?

Ans. Ms. The onus of determining whether an M&A Is a combination rests upon the parties. In cases where the audited financial statements of the previous financial year are not available, unaudited financial statements or best available estimates may be considered for assessing whether the MM is a combination and/or eligible for the benefit of De-Minimis Exemption. However, failure to notify a transaction which satisfies Jurisdictional thresholds based on the audited financial statements of the previous financial year would attract a penalty under the provisions of Section 43A of the Act Further, the acquirer may be asked to notify the transaction if the Commission has reasons to believe that the said M&A qualifies to be a combination.

Q.28 Should Intra Group Turnover be considered part of the turnover for the purpose of Section Sof the Act?

Ans. Ms. The explanation (c) of Section 5 of the Act specifically mentions that the turnover in India shall be determined by excluding int^–a-group sales, indirect taxes, trade discounts and all amounts generated through assets or business from customers outside India, as certified by the statutory auditor on the basis of the last available audited accounts of the company In the financial year Immediately preceding the financial year In which the notice Is filed under sub-section (2) or sub-section (4) of Section 6 of theAct.

Infra-group sales are excluded from the total turnover while computing threshold under Section 5 of the Act. The purpose of the exclusion of Infra-group turnover Is to avoid double counting. However, when an overseas group entity makes further supply (supplied to it under intra-group export) outside India, the turnover relating to such subsequent sale is not counted as turnover in India. Therefore, both the location of the parties to the intragroup sales and the scope of acquisition needs to be appropriately factored In the determination of turnover forth° purpose of Section 5 as well as De-Minimis exemption.

The afore-mentioned concept can be clarified through the following example: Parties Test:

a) In a transaction where Xis acquiring the ultimate parent entity of a group A, the same would lead to the indirect acquisition of all group entities of A. In this case, the value of all Infra-group sales can be excluded for the purpose of Section 5 as well as De-Min his exemption to avoid double counting. For Instance, A holds 100% stake In B. If A is acquired by X (leading to indirect acquisition of B), the value of intra-group sales between Aand B shall be excluded to avoid double counting.

b) No Intra-group sales should be excluded If only one of the group entitles of A, for instance, M, is acquired by X (without any direct or indirect acquisition of other group entities of A). This is because the issue of double counting does not arise, and the standalone financials of the target (La, M) alone are to be considered.

c) If two or more companies within a group are acquired, only the value of sales between them alone can be excluded for the purpose of Section 5 and De-Minimis exemption. For Instance, If P and Q of g rou p A are acquired, only the value of sales between P and Q shall be excluded, and the turnover of P and/or Q with A or any of Its other group entities is not to be excluded.

Location Test:

d) For the computation of worldwide turnover, a location test may not be relevant. However, for the determination of turnover In India, the relationship between the revenue and India Is a relevant factor In the exclusion of intra-group sales. The exclusions mentioned in (a) and (c) above may be warranted when the infra-group sales are of (i) domestic nature (La, sales originating and terminating in India); and/or (ii) the supply is from or to India and further sales (by the buyer in the infra-group sale) Is within India. In simple terms, If the revenue of further sales outside the group Is relatable to India, thereby being already accounted for, the exclusion of all earlier irrtragroup sales is warranted to avoid double counting.

(For reference, please see the order dated 25 October 2021 issued under Section 31(1) of the Act in 62021/081863 at httos^–J/www_cci.00vinicombinationforder/details forder/29/0)

Q.29 Whether reference to “revenue generated from customers outside India” includes turnover generated from assets or business In India from customers outside India Le., export revenue such that such revenue would also be excluded from the computation of ‘turnover In India?

Ans. Ms. Yes, revenue from export from India whether to group entitles or others should be excluded from the computation of ‘turnover In India’.

Q.30 Does ‘turnover’ Include only ‘revenue from operations’ (as per the audited, consolidated financial statements of the entity) for the purposes of computation of turnover’ underthe Act?

Ans. Ms. Yes, ‘turnover’ Includes only ‘revenue from operations’, except for the certain segments of BFSI.

Q.31 How is the turnover determined for entities operating in the Banking, Financial Services, and Insurance (‘BF9r) sector?

Ans. Ms. For Insurance: The value of the turnover would be the gross premium without deducting the reinsurance ceded, and Income such as Income from Investments In shares, securities, real estate or other assets would be considered as a part of turnover where such investments amount to control over the enterprises involved.

Far Banks: Turnover shall be sum of the following items: Operating income La, interest income of a banking enterprise and income such as (i) Commission, exchange and brokerage; (ii) income earned byway of dividends; (iii) Profit (loss) on sale of investments; (iv) leasing income and; (v) Profit (loss) on exchange transactions.

Q.32 Is “OthorIncome” excluded from the computation of turnover?

Ans. Ms. Yes, “Other Income’ need to be excluded from computation of turnover in terms of Section 5 of the Act, except to the extent where the auditor of the entity has opined that certain items of the “Other income” are to be classified as ‘Revenue from Operations’.

B. Deal Value Threshold (DVT)/Substantial Business Operations (SBO)

Q.33 What is the ‘Deal Value Threshold’ under theAct?

Ans. DVT Is a new criterion Introduced under Section 5(d) of the Act [Inserted through the Competition (Arnendment)Act, 2023] as per which transaction Involving acquisition of any control, shares, voting rights or assets of an enterprise, merger or amalgamation is a combination if

a. Its value exceeds I NR 2000 crore; and

b. The enterprise being acquired, taken control of, merged, or amalgamated has substantial business operations in India.

Q.34 What Is Included In the ‘value of transaction’ under Regulation 4(1) of the Combinations Regulations?

Ans. Ms. As per the explanation to Section 5(d) arid Regulation 4(1) of the Combinations Regulations, it Includes every form of valuable consideration, whether direct or indirect, deferred or immediate, and cash or otherwise. This Inter elle covers:

(a) Covenants, undertakings, obligations, or restrictions imposed on any person, if consideration for these is separately agreed [Regulation 4(1)(a)];

(b) All inter-connected steps and transactions as per Regulations 9(4) & 9(5) of Combinations Regulations [Regulation 4(1)(b)];

(c) Payments due within two years from the date on which the transaction would come Into effect for arrangements entered Into as a part of the transaction or Incidental thereto such as IP licensing, technology assistance, marketing, supply, etc. [Regulation 4(1)0].

(d) Call options assuming full exercise [Regulation 4(1)(d)]; and

(d) Best estimates of contingent future payments under transaction documents [Regulation ⁴(¹Xe)].

Q.35 What does “substantial business operations In India” mean under the proviso to Section 5(d) of the Act and Regulation 4(2) of Combinations Regulations?

Ans. As per Regulation 4(2) of the Combinations Regulations, an enterprise shall be deemed to have substantial business operations in India if it meets anyone of the following criteria:

• for digital services provided, the number of Its business users or end users In India Is 10% or more of its total global number of such users; or
• its grass merchandise value (GMV) for the period of twelve months preceding the relevant date in India is 10% or more of its total global gross merchandise value and it exceeds INR 500 crore; or
• its turnover in preceding financial year in India is 10% or more of its total global to mover derived from all products and servicesand it exceeds I NR 500 crore.

Q.36 How Is the transaction value determined when only a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated?

Ans. Ms. As per explanation (f) to Section 5 of the Act, only the relevant value of the said portion or division or business or attributable to it, shall be the relevant value of transaction for the purpose of applicabilityof the thresholds undersection 5 of theAct.

Q.37 How Is the SBO in Ind la determined when only a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated?

Ans. Ms. As per explanation 2(b) of Regulation 4(2) of Combinations Regulations where a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated, the number of its business users or end users, gross merchandise value or turnover, as may be applicable, of the said portion or division or business attributable to it, shall be relevant business users or end users, gross merchandise value orlu mover.

Q.38 Is notification required If the transaction Is below tumover/assets thresholds but meets the DVT?

Ans. Ms. Yes. Even if thresholds under Section 5(a) to (c) of the Ad are not met, breaching the DVT and meeting the SBO in India makes the transaction a combination in terms of Section 5 of the Act, and a notice for ltie combination Is required to be flied.

Q.39 What if the transaction value Is unclear and cannot be established with reasonable certainty?

Ans. Ms. If transaction value is unclear and cannot be established with reasonable certainty, the value of the transaction may be considered as exceeding the amount specified in Section 5(d) of the Act Le. may be considered to exceed INR 2,000 cram.

Q.40 What is Gross Merchandise Value (GMV)?

Ans. Ms. GMV means cash, receivables, or other consideration either for or facilitating, sale of goods and/ or provision of services, by an enterprise, on its own or as an agent or otherwise.

Q.41 Who Is a ‘business user’ and ‘end user?

Ans. Ms. Business user. Business user means any natural or legal person supplying or providing goods or services, including through the use of digital services (e.g., a seller on an e-commerce platform)

End user. End user means any natural or legal person using digital services other than as a business user, for informational or transactional purpose (e.g., streaming shows)

Q.42 If there are two trigger documents being signed for a transaction, what would be the “relevant date” for the assessment crfDVT/8130 and for De Minimls?

Ans. Ms. For the purpose of examination of not Mability, the date of each of the trigger documents would be the relevant date and notifiabi lily would have to be determined accordingly.

Q.43 If as part of the equity deal, some goods/services offered by the Acquirer are being availed by the target for more than 2 years under contract, will the consideration for such services/goods payable to the Acquirer from the Target be included in computation of deal value? For example, an investor is investing INR 6090 crores in Company A in December 2024 for the acquisition of 8% shares in Company A, without any control conferring rights. In return, Company A committed to taking certain servIces from the investor’s-controlled entities over a period of 5 years, not exceeding a value of INR 850 crores. What lathe deal value of this transaction?

Ans. Ms. For an acquisition, the consideration flows to or at the will of the seller or the target. In the given example INR 850 crores would be flowing from the target (not from the acquirer). Therefore, INR 850 crore shall not be added to INR 6000 crore. Therefore, value of the transaction would be IN R 6000 crore only.

Q.44 W a sal ler in exchange for Its stake in a target entity is given non-cash consideration, will the “deal value’ include: only non-cash consideration, or both cash as well as non-cash consideration?

Ans. Ms. The value of the transaction shall include both cash and non-cash consideration.

Q.45 Whether, in share-swap transactions, the value of shares for each part of the transaction to be combined when calculating the transaction value?

Ans. Ms. In case where the consideration is wholly or partly discharged in shares, the deal results in two acquisitions viz., (i) acquisition of shares of Company B by Company A, and (ii) acquisition of shares of Company A by the shareholders of Company B. Therefore, the value of both the acquisitions shall be aggregated to determine deal value of the transaction. In this regard, Regulation 4(1Xb) of the Combinations Regulations 2024 provides that the value of transaction for the purpose of Section 5(d) of theAct shall include the consideration for all inter-connected steps and transactions.

For example, there is a transaction where Awou id acquire 100% shareholding of B, which is valued at INR 1500 crore, and shareholders of B, viz., X and Y, each will get 25% shareholding InA. The value of the transaction would be INR1500 crore (forthe acquisition of shares of B byA) plus INR 1500 crore (for the acquisition of shares ofA by X and Y).

Q.46 If an Investor which already owns majority share capital of a company provides more money through a rights Issue, and that company acquires another enterprise, should the turnover of both companies be added together for the purposes of applicability of the substantial business operation (8130)?

Ans. The provision of Section 5(d) attracts to a transaction Inter ally If the enterprise which Is being acquired, taken control of, merged or amalgamated has such substantial business operations in India. In other words, the substantial business operation test needs to be applied at enterprise level, which is the subject to the acquisition.

For example, In the case of funding by Investor to the Entity A and then acquisition of Entity B by Entity A, there are two acquisitions, one by the investor and another by Entity A. For the purpose of Investment by the Investor, tumover/GMV of both the entity La, EntityA and Entity B need to be aggregated. For the purpose of acquisition by Entity A, only the himover/GMV of Entity B needs to be considered.

Q.47 Whether put or call options negotiated as part of a transaction are to be included while calculating the DVT of the transaction and at what stage are parties required to seek approval?

Ans. Ms. In terms of definition of shares given under Section 2(v) of the Act, the put option does not amount to shares. Therefore, for acquisition of put option, notification requirement is not triggered.

In terms of definition of shares given under Section 2(v) of the Act, the call option amount to shares. Therefore, the person acquiring call option shall examine nottilability before acquisition of the call option itself.

Regulation 4(1)(d) of Combinations Regulations 2024 specifies that deal value shall include consideration for call option and shares to be acquired thereof assuming full exercise of such option. Therefore, at the time of the acquisition of the call option, the value of the transaction (La, deal value) shall Include both the consideration for call option and consideration for shares to be acquired pursuant to the exercise of the call option.

Further, as DVT is based on ‘consideration” but not on ‘fair value’, whatever the amount of consideration has been agreed between the parties would be the value of the transaction regardless of anysubsequent increase in thefairvalue of the consideration.

For example, A purchases call options to acquire two crore shares at INR 1200 each and pays premium of Rs. 10 per call option. The amount of premium paid Is INR 20 crore and amount to be paid upon purchase of shares would be INR 2400 crore. Therefore, deal value would be INR 2420 Grace.

Q.48 What is meant by the call option for the purpose of Regulation 4(1)(d) of the Combination Regulations 2024?

Ans. I. Ms. For the purpose of Regulation 4(1)(d) of the Combinations Regulations 2024, a call option is a right, but not obligation, that entities the holder to purchase or subscribe to a fixed or determinable number of shares at a fared or determinable price. It is immaterial whether eventually the holder exercises its option in part or full or let it lapses altogether. Under the arrangement the counter party has obligation to sell or issue the shares to the holder, once the option is exercised.

The various elements and the factors that render an option to be considered as the call option forthe purpose of Regulation 4(1)(d) are discussed as under.

Timing of Vesting of Right

II. Right under the option may vest immediately or on future date. Generally, the right unconditionally vests into the holder as soon as the arrangement comes into effect. However, the arrangement may provide that the option will vest Into the holder upon a future date fixed in the arrangement, or upon lapse of certain specified time period.

III. If the option shall vest into the holder upon happening or non-happening of any uncertain future event that is beyond the control of the contracting parties or their affiliates, or its outcome in the event of happening of such event, value of such arrangement shall not be considered for computation of deal value of other steps of the transaction. However, In this case, the acquirer of the shares shall give notice to the Commission In terms of Section 6 of the Act before exercise of the option, lithe acquisition of the shares, seen Independently, Is a notifiable transaction.

Illustrations:

(i) XYZ agrees to purchase 1,52,486 shares in company ABC Limited. Further, the arrangement also provides that XYZ can purchase 3,00,000 more shares if the sectoral FDI limit is Increased from 49% to 74%. Since the Increase In the FDI ceiling Is uncertain future event beyond the control of the contracting parties or their affiliates, the value of option related to 3,00,000 shares shall not be considered for computation of deal value of acquisition of 1,52,486 shares in companyABC Limited by XYZ.

(ii) The arrangement provides that XYZ have option to purchase 3,00,000 shares In companyABC Limited at IN R 45 per share within 2 years. However, if the sectoral FDI limit is increased from 49% to 74%, the XYZ shall have option to purchase 5,00,000 more shares at the same price during the aforesaid period. Since the increase in the FDI ceiling is uncertain future event that is beyond the control of the contracting parties or their affiliates, the value of option related to 5,00,000 shares shall not be considered for computation of deal value of option related to said 3,00,000 shares.

IV. Further, if entitlement shall vest into holder after hvo years from the relevant date, the value of the such arrangement shall not be considered for computation of deal value of other steps of the transaction. However, in this case, the holder of the option shall give notice to the Commission In terms of Section 6 of theAct before right vests Into It, If the acquisition of the call option, seen Independently, Is a notifiable transaction.

Illustration:

If XYZ in year 2025 agrees to subscribe to 8,45,975 shares of companyABC Limited at Rs. 2250 per share immediately. Simultaneously an arrangement is entered into which provides that XYZ can also purchase 2,50,000 more shares ofABC Limited at Rs. 3586 per share anytime after year 2029. In this case, for computation of deal value of acquisition of 8,45,975 shares, the value of option related to 2,50,000 shares shall not be considered.

Underlying Security

V. The name of entity(ies) whose shares can be purchased are pre-agreed under the arrangement.

Illustrations:

• The option entities the holderto purchase share ofABC Limited.
• The option entitles the holder to purchase shares of either ABC Limited or PQR Limited.

(III) The option entitles the holder to purchase shares of either ABC Limped or FOR Limited or any combination of shares of ABC Limited and PQR Limited.

Pricing

VI. The price at which the shares can be purchased are either fixed in advance or pricing formula (method of computation of price) Is prescribed In advance under the arrangement.

Illustrations

(I) The option provides that shares can be purchased at I N R 52 per share.

(II) The option provides that shares can be purchased at a price which will be 13 times of earning per share for the financial year preceding to the financial year in which the option Is exercised.

(III) The option provides that the pre-money enterprise value of the target company would be three times of EBITDAfor the financial year preceding to the financial year in which the option is exercised. The per share price shall be arrived by dividing the excess of enterprise value over the outstanding amount of long terms debt at the end of the said preceding financial year by the total number of shares outstanding end of the said preceding financial year.

Numberof shares

VII. The number of shares that can be purchased are eitherfixed In advance or the formula for determination of number of shares that the option holder can acquire is prescribed in advance under the arrangement

Mustridions:

(i) The option providesthat XYZ can purchase 4,81,000 shares.

(ii) The option provides that XYZ can purchase such number of shares so that Its shareholding in company PQR Limited remains 49%.

(iii) The option provides that XYZ can purchase such number of shares so that its shareholding in company PQR Limited increases to 49%.

The option provides that XYZ can purchase such number of shares whose value shall be equal to Rs. 1000 crore.

Q.49 Doss ‘future outcome’ In Regulation 4(1Xe) of the Combinations Regulations 2024 Include: (I) corporate guarantees, (II) possible future Investments or acquisitions—even if not planned or certain during the first deal, and (iii) future payments that depend on certain conditions?

Ans. The clause covers the situations where obligation to pay consideration or the amount of consideration or both are contingent on the outcome of the future event. The clause does not cover the amount of corporate guarantee for loan taken by the target Future events (such as acquisitions or top-up investments) not contemplated at the time of the transaction need not be included in the computation of deal value.

Q.50 If an acquirer invests a certain amount now for acquisition of certain equity stake, and there Is a possibility of buying more shares later depending on some future conditions, should the value of that possible future purchase be included In the total deal value?

Ans. Ms. Yes, it needs to be included in computation of deal value based on best estimates in terms of Regulation 4(1Xe) of the Combinations Regulations 2024.

Q.51 Should an acquirer’s affiliate consider a prior acquisition by the acquirer when calculating the deal value to assess whether a subsequent acquisition (by acquirer’s affiliate) from the same target is notifiable, even if the prior acquisition did not contemplate a follow-up Investment?

Ans. Yes, for the purpose of computation of deal value of the follow up Investment Le. Second Proposed Acquisition, the value of the prior acquisition needs to be considered in terms of Explanation (c)to the Regulation 4(1) of the Combinations Regulations 2024.

Q.52 If future transactions/acquisitions are also included within the scope of ‘future outcomes’, will the competition assessment of such future transaction(s) to be undertaken? If not, could such future transactions} trigger a separate filing at a laterstage?

Ans. Ms. Based on the certainty of the transaction, the decision is taken by the Commission on case-to-case basis. If the future transaction is not approved by the Commission, its notifiability is to be examined as per the law in force at the time when the same takes place.

Q.53 if separate to the equity deal, parties have contractually agreed that the Seiler will continue to be the KMP of the Target fora certain duration post-closing, and If the Seller Is able to ensure that the Company meets certain pre-determined criterion target over the course of the certain duration, then he will be paid an additional amount. Should this amount be included in the deal value?

Ans. In terms of Regulation 4(1)(e) of the Combinations Regulations 2024 read with explanation (h)to the Regulation 4(1), this amount needs to be added as per best estimates of board of directors or any other approving authority of the person obligated to file notice to the Commission. If the estimate is not recorded by the board of directors or any other approving authority of the person obligated to file notice in its approval, the maximum payable amount shall be considered as the best estimate. Further, as per the best estimate of the person specified as above recorded that no amount would be payable, nothing Is to be added In the computation of the value of the transaction.

Q.54 Provide some examples of services/acthethas that would constitute as ‘digital services’.

Ans. E-commerce platform service, Cloud services, and online gaming, etc.

Q.55 When does a service be considered a “digital service “? If a digital service provided by an enterprise does not constitute its primary business activity, should the same be considered as a ‘Digital Service’?

Ans. Under the Explanation 2(d) of Regulation 4(2), Digital Service is defined to mean the provision of a service or one or more pieces of digital content, or any other activity by means of an Internet whether for consideration or otherwise to the end user or business user, as the case may be.

For an activity to constitute a digital service, at first, it should be service. Sales of goods on own behalf does not amount to provision of service. If any person selling goods through its own website or through any third-party platform, to this extent, it is not considered to be providing digital services as the person Is selling goods and not providing services.

Notiflability criteria need to be objective and even If a digital service provided by an enterprise does not constitute its primary business activity, should the same be considered as a ‘Digital Service’.

Q.56 Should the use of intemet as a distribution channel be considered for classifying any offline product/service as a ‘digital service’? Whether a service be exclusively offered, delivered, and consumed online to be classified as a digital service?

Ans. Mere use of intemet as a distribution channel is not enough to classify any offline product/service as a ‘digital service’.

For example, in case of an insurance company, the service that is being provided by the company is essentially of Indemnification. As and when the occasion arise the claim may be lodged through physical or digital channel. Despite the use of delivery of policy through digital means, It does not constitute a digital service because essentially, It is indemnification service, which is non-digital.

However, where a digital platform provides service by bringing insurance company and the customer together, the service provided by the platform is digital service.

Q.57 Whether the criterion of 4:31,1V given In Regulation 4(2)(b) of Combinations Regulations 2024 for assessing breach of the DVT Is limited to entities which are engaged In sales and provision of services via platforms and a-commerce anttliss?

Ans. If the target is just selling goods/providing services only on its behalf, the provision of Regulation 4(2)(b) of Combinations Regulations 2024 does wisp*.

To determine whether provisions of Regulation 4(2)(b) of Combinations Regulations 2024 applies or not, relevant criteria Is whether the target is engaged in facilitating sales of goods/provision of services as an agent, or otherwise or not It is immaterial whether business model of target is digital or traditional.

Q.58 Whether a deal will be considered completed, and avoid application of the DVT, if the transfer of shares under the deal has become Irreversible, even If certain additional steps related to the deal remain pending? For example:

a. Will true-up of closing day financial assumptions result In a deal being considered incomplete?

b. Will a performance- linked upside payment result In a deal being called incomplete?

c. Will a ‘mop up’ of shares from other shareholders (not affiliated to the principal seller) be considered part of the same deal and result In a deal being considered Incomplete?

Ans. For (a) and (b) No. For (c), If mop up of shares Is Inter-connected to the transaction under consideration, then ‘mop up’ of shares from other shareholders should be considered for examining nottflability of the transaction.

Q.59 How are deal value thresholds computed In case of newly formed Joint ventures?

Ans. Green field joint venture or newly formed joint ventures would not require notification.

Q.60 For companies offering multiple digital services, whether the GMV Test Is to be calculated perservice or aggregated across all digital services?

Ans. For a platform which is selling on its own products/services as well as facilitating sales of the products/services of others on its platform, the same will be covered under digital service.

Regulation 4(2) of Combinations Regulations 2024 provides that for the purpose of proviso to Section 5(d) of the Act, the enterprise referred therein shall be deemed to have substantial business operations in India, if:

(b) its gross merchandise value for the period of twelve months preceding the relevant date in India is:

i. 10% or more of its total global gross merchandise value, and

ii. more than rupees five hundred crores; or

Accordingly, as per regulation, GMV needs to be considered at the enterprise level. In other words, the aggregated GMV of the enterprise being acquired should be considered.

However, in terms of the Explanation 2(b) of Regulation 4(2) Combinations Regulations, 2024 where a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated, the gross merchandise value of the said portion or division or business shall be relevant gross merchandise value.

Q.61 Whether the value of consideration to be accounted for the computation of the deal value of a transaction be restricted to the consideration that Is aftributabte to the specific acq ulrer of that transaction?

Ans. Regulation 4(1)(b) requires inclusion of consideration for inter-connected steps. In other words, the consideration or different transactions need to be aggregated only If they are inter-connected. Consequently, Inter-connection between the transaction(s) is pre-condition for aggregation.

For a transaction involving multiple co-investors who are investing in the same target enterprise and are not inter-connected, aggregation of consideration paid/payable by the different investors would not be required.

Q.62 How to calculate the deal value In cases of internal reorganization?

Ans. Ordinarily the internal re-organisation should qualify for exemptions provided under the Competition (Criteria for Exemption of Combinations) Rules, 2024 (Exemption Rules).

However, If any reorganisation does not qualify for benefit of the Exemption Rules, the deal value of the transaction would be arrived at by aggregating the value of all the inter­connected steps.

Q.63 Whether the assessment of SBO Test (for digital services and for assessment (Atha GMV Test) would require the GMV or users (as the case may be) to be consolidated In case of multiple Targets?

Ans. If an acquirer is acquiring multiple targets at once, for determination of notifiability, the consideration for all the targets, and user/turnover/GMV of all the targets should be aggregated for applying deal value thresholds and substantial business operation tests, respectively

Q.64 In case a share acquisition and debt transaction are happening simultaneously, (a) whether It Is required to add the deal value of the share acquisition with that of the debt transaction? and (b) Whether only equity acquisitions should be counted toward the deal value, and debt restructuring or related transactions should be excluded?

Ans. Pure debt transactions (debt not convertible to equity) are not notifiable. Therefore, the question of computation of deal value In relation thereto does notarise.

However, in consideration of an acquisition, if any debt is assumed, the amount of debt so assumed should be included in the deal value as the same is also a consideration for the seller.

Q.65 In case of multi-step transactions:

a. If a target is based out of India (and Is not breaching the SRO Test), but at some time In future, the target’s operations/ business would move to India. Whether re-assessment of SBO Is required when transfer happens or at the time of signing?

b. In case an investment is contemplated in transaction documents which may happen after 1-2 years, whether It Is again required to re-assess S60 at the time of undertaking Investment or at the time of signing?

c. If one of the SPVs of a PE fund has acquired certain shares, say 1-2 years ago In a target and then another SPV (of the same fund or separate) proposes to Invest in the same target either in the same round or separately, whether to add their deal values for assessing notifiability? Whether the acquisition by one of the consortia members also needs to be considered?

Ans. (a) & (b): In this regard, Regulation 4(2) of Combinations Regulations 2024 provides that users/GMVitu mover need to be considered for the period that is prior to the relevant date (in simple terms, the signing date). Therefore, the period for which users/GMVttumover needs to be considered gets frozen as soon as the signing takes place. Accordingly, irrespective of the date when the nottfiability is examined, the same remains unchanged. So, there is no need to re-look at SBO when the transfer happens as whenever the test is applied, the outcome would remain the same.

(c): the explanation (c) to Regulation 4(1) of Combinations Regulations 2024 provides that value of the transaction shall include consideration for any acquisition by one of the parties or its group entity in the enterprise being acquired or merged or amalgamated in the transaction, anytime during the period of two years before the relevant date. Therefore, if one of the SPVs of a PE fund has acquired certain shares in a target (First Acquisition) during last 2 years from the signing date for the subsequent acquisition by another SPV/same SPY of the same PE in the same target (Second Acquisition), the amount of the First Acquisition also needs to be considered for examining nottflability of the Second Acquisition as it meets the above underlined regulation.

With regard to the acquisition by consortium member, the acquisition by one of the consortia members needs to be considered if it forms parts of the same group.

Q.66 Whether all transactions entered into between the same parties in the past two years are to be considered forthe purposes of Deal Value Threshold computation?

Ans. The Regulation 4(1)(c) of Combinations Regulations 2024 provides that certain payments need to be included in computation of deal value only for arrangement(s) entered into as a part of the transaction or incidental thereto.

C. Fund Management Activities

Q.67 What isthe typical structure of a fund management activity?

Ans. Fund management business envisages demutualization of beneficial Interest and management or control over the operations. Investors contribute to the funds for Investment. Subscribers to the fund transfer authority to the Investment managers to conduct the operations of the fund and do not possess authority to take decisions relating to the operations of the fund. Generally, the fund manager conducts the day-to-day affairs of the funds and takes decisions in relation to investments, including the time; target; value, scope and quantum of investment; and exit Though the beneficial interest of these categories of funds Iles with subscribers, the control over the operations and management of the fund is entrusted to the investment manager. Fund structure may also envisage a trustee. The trustee Is generally vested with the power of monitoring the activities of the fund manager and compliance of the relevant governing agreements and does not Interfere with the decision-making authority of the fund manager. Fund structure may also envisage a custodian that holds the securities of various funds in its custody. Governing agreements and/or law may provide for the removal of trustee, fund manager and custodian with the decision of a certain majority of the subscribers.

Q.68 Has the Commission Issued any order In respect of the acquisition of fund management businesses?

Ans. Yes, the Commission Issued an order dated lr December 2021 under Section 43A of the Act in relation to the acquisition of real estate fund management and private equity fund management businesses of IDFC Alternatives Urn ited by Investcorp India Asset Managers Private Limited.

(For reference, please see order dated 17^th December 2021 issued under Section 43A of the Act against Invest Corp India available at httlasitwwwcanovin/combination/orders-section43a 44)

Q.69 In cases of Real Estate investrment That, (REIT) or similar structures, should the supplies of these structures be attributed to their manager?

Ans. The relevant regulations governing these types of structures, infer alia, provides that the manager shall undertake the management of assets, Including supplies of these structures. Primarily, the manager is responsible for the operation and management of these structures. Thus, the fund manager of these structures Is likely to have the ability to significantly influence policies and practices relating to the goods and services supplied by these structures. Therefore, for the purposes of a combination involving the manager of these structures or person(s) controlling such manager, the supplies of these structures should be attributed to the manager or such controlling persons.

(For reference, please see order dated 24^th February 2021 issued under Section 31(1) of theAct In C-2020/12/794 athtizis://www.cci.gov.in/combination/orderidetalls/order/178/0)

Q.70 In cases of acquisition of any Investment management businesses, would the value of assets and turnover of the controlled portfolio enterprise [La, controlled invests° entities of the fund] also be relevant for the purpose of computing threshold under Section 5 of the Act as wall as the De-Minimis exemption threshold?

Ans. Yes, in cases of acquisition of any Investment management businesses, the value of assets and turnover of the controlled portfolio entities would also be relevant for the purpose of computing threshold under Section 5 of the Act as well as the De-Minimis exemption.

(For reference, please see order dated 17″ December 2021 issued under Section 43A of the Act against Invest Corp India available at tritos:thwdw.cci.govin/oombinationt orders-section43a 44).

Q.71 Would an acquisition of control over management or assets of any enterprise that meet financial thresholds prescribed under Section 5 of the Act not be considered a combination if the acquirer does not acquire beneficial interest/ownership over the enterprise?

Ans. In terms of the provisions of the Act, acquisition is not limited to acquisition of beneficial ownership but extends beyond that. In terms of Section 2(a) of the Act, acquisition of control over management or assets of any enterprise is also included in the definition of an acquisition.Acquisition of control is one of the forms of combination under Section 5 of the Act, even if the acquirer of control does not acquire beneficial interest/ownership over the acquired enterprise.Accordingly, the acquirers need to give notice in terms of Section 6(2) of the Act read with the relevant provisions of the Combination Regulations 2024. The said requirement of law is not dispensed with merely on account of the beneficial Interest/ownership being vested in person(s) other than the acquirer. This position Is not limited to acquisition by funds butapplies to any acquisition, merger and amalgamation.

(For reference, please see order dated 17″ December 2021 issued under Section 43A of the Act against Invest Corp India available at httos://vmw.cagovin/combineitent orders-section43a 44)

Q. 72 For assessing that any financial thresholds prescribed under Section 5 of the Act are met by any acquisition, merger or amalgamation, would It be relevant whether the value of assets and turnover of the existing controlled portfolio enterprises are beneficially owned or not, for the purpose of computing threshold under Section S of the Act?

Ans. Yes, the value of assets and turnover of the controlled enterprises, beneficially owned or not, would be relevant forthe purpose of computing threshold under Section 5 of the Act

(For reference, please see order dated 17^th December 2021 issued under Section 43A of the Act against Invest Corp India available at httos://‘weivccl.govin/osmbination/ orders-section43a 44).

Q.73 Should the assets and turnover of the controlled portfolio enterprise of a fund be attributed to the Investment manager only If both the fund manager and trustee are acquired or subjected to common control?

Ans. No, as long as the Investment manager Is responsible for decision making relating to the operational management of the fund, it would enjoy control over the fund. This factual aspect would be the same, whether or not the trustee Is being acquired or subjected to common control. Accordingly, assets and turnover of the controlled portfolio entities of a fund should be attributed to the investment manager whether or not the trustee is being acquired or subjected to common control.

(For reference, please see order dated 17^a December 2021 issued under Section 43A of the Act against Invest Corp India available at httrxiftwww.cci.gov.in/combination/ orders-sectIon43a 44).

Q.74 In cases of fund management structures, should supplies of goods and services of these structures or their portfolio enterprises be attributed to their manager or the person controlling such manager?

Ans. The relevant regulations and/or agreements governing these types of structures, inter aria, provide that the manager shall undertake management of assets/funds. Primarily, the manager is responsible for the operation and management of these structures. Thus, the fund manager of these structures Is likely to possess the ability to significantly Influence policies and practices relating to goods and services supplied by these structures and exercise rights/abilities possessed by these funds in their portfolio entities. Therefore, for the purposes of a combination involving the manager of these structures or person(s) controlling such manager, supplies of these structures or their portfolio enterprises should be attributed to their manager or person controlling such manager.

(For reference, please see order dated 24^a February 2021 issued under Section 31(1) of the Act In C-2020/12/794 available at httos://vAvw.cagov.In/combinatIon/orders-section31

Q.75 In cases where the services of the investment manager can be terminated by the trustee, whether it will change the position regarding existence of control of fund manager over management and affair of the fund?

Ans. Where the investment manager enjoys operational control over the fund, the overall supervision of certain aspects may Ile with the trustee. Mere ability and/or possibility of the trustee to terminate the investment manager; that too only after obtaining specified approval from unit holders, does not negate the fact of operational control of the acquirer over the operations of the target business.

(For reference, please see order dated 17^th December 2021 issued under Section 43A of the Act against Invest Corp India available at httpsfhweiv.cci.gov.in/comblnation/ orders-section43a 44)

Q.76 In the case of fund management structure, is the existence of joint control of the trustee or the unit holder a factor to conclude that the investment manager does not have control over the fund?

Ans. A fund may be subject to Joint control, de facto or de jure, of the Investment manager, trustee and/or the unit holder. However, mere existence of joint control of the trustee or the unit holder is not a factor to conclude that the investment manager does not have control over the fund.

(For reference, please see order dated 17^th December 2021 issued under Section 43A of the Act against invest Corp India available at httos://sweiv.ixi.gov.in/combination/ orders-section43a 44)

Q.77 In case of fund management structure, for the purpose of Section 5 of the Act, should De Minimis exemption, assets and turnover of controlled portfolio entities, and for the purpose of identification of horizontal overlaps, vertical interfaces and complementary activities, supplies of goods and services by the fund or their portfolio entitles, always be attributed to the manager of the fund and person controlling such manager?

Ans. Generally, In case of fund management structures, the manager Is responsible for the operation and management of these structures. The fund manager has the authority to conduct the day-to-day affairs of the funds and take decisions in relation to investments, including the time; target value, scope, and quantum of investment and exit The fund manager also exercises rights/abilities possessed by these funds in their portfolio entitles. However, by agreement or otherwise, if trustee, unit holders or any other person acquires from, or share with, the rights or abilities possessed by the fund manager, then such acquisition or sharing of rights or abilities possessed by the fund manager shall amount to an acquisition in terms of Section 2(a) of the Act

For the purpose of Section 5 of the Act and De-Minimis exemption, assets and turnover of controlled portfolio entitles of the fund shall also be attributed to such trustee, unit holders or any such other person.

For the purpose of identification of horizontal overlaps, vertical interfaces and complementary activities, supplies of goods and services by the fund or their portfolio

entities shall also be attributed to such trustee, unit holders or any such other person.

For the purpose of mapping of overlaps, the controlled entities of ‘ultimate controlling person’ {‘UCP’) of the Acquirer, affiliates of the UCP, affiliates of controlled entitles of UCP and controlled entities of affiliates of UCP and the Target along with its downstream controlled entitles, Its affiliates, affiliates of Its controlled entitles and controlled entities of its affiliates need to be considered.

Q.78 Provide a definition for ‘ultimate controlling person’.

Ans. Ultimate Controlling Person refers to person(s) that directly or indirectly controls the entity(ies) under consideration.

Q.79 Can an entity have multiple ‘ultimate controlling persons’?

Ans. Yes, an entity Including a Joint venture can have multiple ‘ultimate controlling persons’.

Q.80 Whether notifying parties need to consider an affiliate of an affiliate when assessing competition overlaps, linkages, or complemental-tiles?

Ans. For the purpose of mapping of overlaps the controlled entities of UCP of the Acquirer, affiliates of the UCP, affiliates of controlled entities of UCP and controlled entities of affiliates of UCP and the Target along with its downstream controlled entities, its affiliates, affiliates of Its controlled entitles and controlled entities of Its affiliates need to be considered.

Q.81 Do the financials of an enterprise need not be considered for the purpose of Section 5 of the Act, De-Minimis exemption, , merely because applicable accounting standards do not require the consolidation of financials of such entity?

Ans. The testing of the thresholds prescribed under Section 5 of the Act is not dependent upon whether the enterprise prepares consolidated financial statements under the accounting standards or not. This position Is not limited to acquisition by funds, but applies to any acquisition, merger and amalgamation.

(For reference, please see order dated 17^th December 2021 issued under Section 43A of the Act against invest Corp India available at https://vmw.cci.govin/combinetiont orders-section43a 44)

Q.82 Whore an acquirer holds partial ownership/control In an enterprise and enters or proposes to enter another acquisition, merger or amalgamation, should only a proportionate share In the financials of such partially ownedicontrolled enterprise be considered for assessing the financial thresholds prescribed under Section 5 of the Act for the envisaged acquisition, merger or amalgamation?

Ans. Section 5 of the Act does not operate on the basis of proportionality. Even if an enterprise acquires/has material Influence (which Is the starting threshold of control) over another entity, the whole of the financials of the target enterprise would be taken into consideration for the purpose of Section 5 of the Act. Thus, if control is established, the complete financials of thefundftargetwould be attributed to the control holder.

(For reference, please see order dated 17^th December 2021 issued under Section 43A of the Act against Invest Corp India available at httos://vmw.ccl.gov.InicomblnatIont orders-seclion43a 44)

D. Exemptions to Combination

Q.83 Is there any provision in the Act for granting exemption from its applicability?

Ans. Yes, Section 54 of the Act enables the Central Government to provide exemption from the application of the Act or any provision thereof. This power can be exercised by the Central Government to provide exemption to any enterprise which performs a sovereign function on behalf of the Central Government or a State Government; or any class of enterprises if such exemption is necessary in the interest of security of the State or public interest; or any practice or agreement arising out of and in accordance with any obligation assumed by India under any treaty, agreement or convention with any other country or countries.

Where exemption Is provided to any enterprise which performs a sovereign function on behalf of the Central Govemment or a State Government and enterprise is engaged in any activity including the activity relatable to the sovereign functions of the Government, the Central Government may grant exemption only in respect of activity relatable to the sovereign functions.

The power to grant exemption can be exercised by the Central Government by issuing a notification in official gazette. The exemption notification may also specify the period for which the exemption has been granted.

Q.84 Are any of the exemptions granted by the Central Government In exercise of power conferred under Section 54 of theAct In relation to combinations In vogue?

Ans.. Yes, the following exemptions are applicable in relation to the provisions regarding combinations:

• Exemption to Banking companies:

The Central Government, vide notification no. S.O. 1034(E) published on 11 March 2022 in public interest has exempted a banking company in respect of which the Central Government has issued a notification under Section 45 of the Banking Regulation Act, 1949, from application of the provisions of Sections 5 and 6 of the Act for a period of five years from the date of publication of the notification in the Official Gazette.

• Exemption to Regional Rural Banks:

The Central Government, vide notification no. S.O. 3236(E) published on 14 July 20231n public interest has exempted regional rural banks in respect of which the Central Government has Issued a notification under Section 23A (1) of the Regional Rural Banks Act, 1976, from the application of provisions of Sections 5 and 6 of the Act fora period of five years from the date of publication of the notification in the Official Gazette.

• Exemption to Nationalised bank:

The Central Government, vide notification no. S.O. 2828(E) published on 30 August 2017 In public Interest has exempted all cases of reconstitution, transfer of the whole or any part thereof and amalgamation of nationalised banks under the Banking Companies (Acquisition and Transfer of Undertaidngs) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, from the application of provisions of Sections 5 and 6 of the Act for a period of ten years from the date of publication of the notification in the Official Gazette.

[Copy of all notifications are available at htips;ficci.gov.inicombinatiorillegal-framworki notificationsl

Q.85 What are the conditions to be satisfied for availing the benefit of Da-Minimis exemption?

Ans. As of now, the benefit of De-Minimis exemption is available where the value of assets being acquired, taken control of, merged or amalgamated [i.e., target] is not more than INR 450 crores in India or turnover Is not more than I N R 1250 crores in India.

Q.86 If an M&A qualifying as a combination In terms of provisions of Section 5 of the Act also requires approval of other authority (les) In India under provision of any other law for the time being In force, would the requirement of obtaining approval of other authority (les) mean that the requirement of giving notice to the Commission In terms of Section 6(2) of the Act does not apply?

Ans. Section 60 of the Act provides that the provisions of the Act shall have an effect notwithstanding anything inconsistent therewith contained in any other law for the time being In force. Further, Section 62 of the Act provides that the provisions of the Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force. Thus, the obligation to give notice to the Commission under Section 6(2) In relation to a combination does not get discharged merely on the grounds that the M&A also requires approval of any other authority (ies) in India.

In the matters relating to acquisition of 51% of equity share capital in each of Western Electricity Supply Company of Orissa Limited (WESCO), Southern Electricity Supply Utility of Odisha Limited (SOUTHCO) and Central Electricity Supply Utility of Orissa Limited (CESU) from the Grid Corporation of Odisha Limited (G RI DCO) by the Tata Power Company Limited (TPCL), notice to the Commission was given after consummation of the combinations. TPCL, inter aka, submitted that the concerned transactions were different from a typical commercial transaction, as these were end-to-end regulated by the Odisha Electricity Regulatory Commission (OERC). The OERC had the exclusive Jurisdiction to regulate combinations in the electricity sector in view of Section 60 of the Electricity Act, 2003, which empowers OERC to Issue appropriate directions if, in Its opinion, such acquisition/combination will cause an adverse effect on competition in the electricity market In India. Further, Sections 173, 174 and 175 of the Electricity Act, 2003, Inter elle, state that the provisions of the Electricity Act, 2003 shall have an overriding effect

The Commission, in its orders dated 17′ March 2022 issued under Section 43A of the Act, Inter el/a, observed that, keeping In view the object and purpose underlying both the enactments, viz., the Electricity Act, 2003 and the Competition Act, 2002, the sectoral regulator cannot be said to have exclusive jurisdiction in relation to combinations In the electricity sector and that the notice ought to have been filed with the Commission under Section 6(2) of the Act.

[The details of these cases are available at rittiss://wAw.cci.gov.in/combinatIonforders-section 43a 441

Q.87 Are there any categories of combinations in relation to notice under Section 6(2), (2A) and 6(4) of the Act which are exempt?

Ans. The following categories type of combination are exempt in relation to notice under Section 6(2), (2A) and 6(4)of the Act:

• Those covered under Competition (Criteria fo► Exemption of Combinations) Rules, 2024:

Section 6(7) of the Act provides that certain categories of combinations shall be exempted from the requirement to comply with sub-sections (2), (2A), and (4), which are mentioned in the Schedule to the Competition (Criteria for Exemption of Combinations) Rules, 2024.

• De-Minimis exemption:

As per Section 5(e) oftheAct, where either the value of assets or turnover of the enterprise being acquired, taken control of, merged or amalgamated in India is not more than such value as may be prescribed, such acquisition, control, merger or amalgamation, shall not constitute a combination under Section 5.

As of now, the benefit of De-Minimis exemption is available where the value of assets being acquired, taken control of, merged, or amalgamated [i.e., target] is not more than INR450crores in India ortumover is not more than INR 1,250 crores in India.

• Share subscription or financing facility or acquisition by PFI, FPI, Bank, or Category IAJF:

As per Section 6(9) of the Act, the provisions of Section 6 does not apply to share subscription or financing facility or any acquisition, by a public financial Institution, foreign portfolio investor, bank or Category I alternative investment fund, pursuant to any covenant of a loan agreement or Investment agreement.

Q.88 In what Instances can a PFI, FPI, bank or Category I AIF benefit from the exemption under Section 6(9) of the Competition Act?

Ans. The categories of the investors, specified under the Section 6(9) of the Act can avail benefit provided therein, if acquisition of shares takes place pursuant to default in compliance with any covenant of a loan agreement or Investment agreement with regard to debt or pure debt instrument.

Q.89 What are the categories of the combinations contained In Schedule to the Competition (Criteria for Exemption of Combinations) Rules, 2024 which are exempted?

Ans. Certain categories of the combinations contained In Schedule to the Competition (Criteria for Exemption of Combinations) Rules, 2024 are exempted from the requirement to comply with sub-sections (2), (2A) and (4) of Section 6 of the Act and those are as under.

1. An acquisition of shares of an enterprise in ordinary course of business where the said transaction is—

a. an acquisition of unsubscribed shams upon devolvement as per covenant of an underwriting agreement by any person registered with the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act 1992 (15 of 1992) or other sim liar authority established under any law for the time being in force outside India, as an underwriter, in so far as the total shares or voting rights held by the acquirer, directly or indirectly, does not entitle the acquirer to hold more than twenty-five per cent. of the total shares or voting rights of the company, of which shares are being acquired; or

b. an acquisition of shares as a stockbroker registered with the Securities and Exchange Board of India, Of other similar authority established under any law for the time being In force outside India, In so far as the total shares or voting rights held by the acquirer, directly or indirectly, does not entitle the acquirer to hold more than twenty-five per cent of the total shares or voting rights of the company, of which shares are being acquired; or

c. an acquisition of shares as a mutual fund registered with the Securities and Exchange Board of India, or other similar authority established under any law for the time being in force outside India, in so far as the total shares Of voting rights held by the acquirer, directly or Indirectly, does not entitle the acquirer to hold more than ten per cent. of the total shares or voting rights of the company, of which shares are being acquired.

2. An acquisition of shares or voting rights solely as an investment in so far as the total shares or voting rights held by the acquirer, directly or indirectly, does not entitle the acquirer to hold more than twenty-five per cent. of the total shares or voting rights of the company, of which shares or voting rights are being acquired, not leading to acquisition of control of the enterprise whose shares or voting rights are being acquired.

Explanation: – in Rule 2, the acquisition of shares or voting rights of an enterprise shall be treated solely as an investment where—

a. pursuant to the said acquisition, the acquirer does not gain a right or ability to have a representation on the board of directors of any enterprise either as a director or as an observer;

b. pursuant to the said acquisition, the acquirer does not gain a right or ability to access commercially sensitive Information of any enterprise;

c. the acquirer or its group entities and their affiliates are not engaged in—

i. any activity relating to production of similar or identical or substitutable product or service as offered by the target or Is downstream group entitles and their affiliates;

ii. any activity relating to production, supply, distribution, storage, sale and service or trade in product or provision of service which are at different stages or level of production chain to the activities of the target or of its downstream group entities arid their affiliates; or

iii. any activity relating to production, supply, distribution, storage, sale and service or trade in product or provision of service which are complementary to the activities of the target or any of its downstream group entities or their afflilatias:

Provided, where the acquirer or Its group entities or their affiliates are engaged In any of the aforesaid activities mentioned in this clause, the acquisition shall be considered to be solely as an Investment ff such acquisition does not result In the acquirer holding ten per cent. or more shares or voting rights after the acquisition.

3. An acquisition of additional shares or voting rights of an enterprise by the acquirer or Its group entities, where the acquirer or Its group entitles, prior to acquisition, holds shares or voting rights of the enterprise, but does not hold more than twenty-five per cent. of the shares or voting rights of the enterprise, either prior to or after such acquisition:

Provided that—

i. such acquisition does not result In acquisition of control of such enterprise by the acquirer or its group;

ii pursuant to  the acquisition, the acquirer or its group entities do not gain a right or ability to have a representation on the board of directors of any enterprise either as a director or as an observer for the first time;

iii. pursuant to the acquisition, the acquirer or its group entities do not gain a right or ability to access commercially sensitive information of any enterprise for the first time except where the acquirer or its group entities already have right or ability to have a representation on the board of directors of any enterprise as a director;

iv. In case the activities of the acquirer or Is group entities and their affiliates exhibit horizontal or vertical or complementary linkages with the activities of target or its downstream group entitles and their affiliates, the incremental shareholding or voting rights acquired by a single acquisition ora series of smaller inter-connected acquisitions does not exceed five per cent. and such acquisition does not result in the shareholding or voting rights of the acquirer or its group entities increasing from less than ten percent to ten percent. or more.

4. An acquisition of additional shares or voting rights of an enterprise by the acquirer or its group entities, where the acquirer or its group entities, prior to acquisition, holds more than twenty-five per cent. shares or voting rights of the enterprise, but does not hold more than fifty percent. of the shares or voting rights of the enterprise, either prior to or after such acquisition: Provided that such acquisition does not result in change in control of such enterprise_

5. An acquisition of shares or voting rights, where the acquirer or its group entities, prior to acquisition, has more than fifty per cent. shares or voting rights in the enterprise whose shares or voting rights are being acquired, except in the cases where the transaction results in change in control of such enterprise.

6. An acquisition of assets of an enterprise in ordinary course of business. The acquisition of assets of an enterprise shall be treated as in ordinary course of business provided that said acquisition involves acquisition of stock-In-trade, raw materials, stores and spares, trade receivables or other similar current assets that do not constitute business.

7. An acquisition of assets, not directly related to the business acthilty of the party acquiring the asset or made solely as an investment, not leading to control of the enterprise whose assets are being acquired except where the assets being acquired represent substantial business operations in a particular location or for a particular product or service of the enterprise, of which assets are being acquired, irrespective of whether such assets are organised as a separate legal entity or not.

8. An acquisition of shares pursuant to a bonus issue or stock splits or consolidation of face value of shares or buy back of shares or subscription to rights Issue of shares, not leading to a change in control.

9. An acquisition of assets by one person or enterprise, of another person Of enterprise within the same group, except In cases where there Is change In control over assets being acquired.

10. A merger or amalgamation of enterprises within the same group provided that the transaction does not result In change In control.

11. Acquisition of shares, control, voting rights or assets by a purchaser approved by the Competition Commission of India pursuant to and in accordance with its order under Section 31 ofthe Act

12. Demerger of a company and issue of shares by resulting company, in consideration of demerger, either to the demerged company or to the shareholders of the demerged company in the proportion of their shareholding in the demerged company viol-to the demerger, except for discharge of consideration for fractional shares.

Q.90 Is the acquisition of shares in the ordinary course of business exempt from filing notice?

Ans. Yes, certain acquisitions of shares in the ordinary course of business are exempt from notification to the Competition Commission of India (CCI), provided they meet following specific conditions:

Acquisition of Unsubscribed Shares under Under writi ng Agreements:

1. If an entity registered with the Securities and Exchange Board of India (SEBI) or a similar foreign authority acquires unsubacribed shares upon devolvement as per an underwriting agreement, and

2. The total shareholding or voting rights do not exceed 25% of the company’s total shares.

Acquisition of Shares by Stockbrokers:

3. If a stockbroker registered with SEBI (or a similar foreign authority) acquires shares during normal trading operations, and

4. The total shareholding or voting rights do not exceed 25% of the company’s total shares.

Acquisition of Shares by Mutual Funds:

5. If a mutual fund registered with SEBI (or a similar foreign authority) acquires shares as part of its portfolio investments, and

6. The total shareholding or voting rights do not exceed 10% of the company’s total shares.

These exemptions are for the purposes of ensuring that frarxjal transadions of frequent routine and usual nature by under wtters, stockbrokers, and mutual funds do not trigger filings, provided the acquisition remains within the specified shareholding limits.

Q.91 One of the conditions for availing the benefit of Item 2 of Schedule of the Combination (Criteria for Exemption of Combinations) Rules, 2024 is that the acquisition should be solely an investment. Which typo of acquisitions can be considered solely as investments?

Ans.One of the conditions for availing the benefit of Item 2 of Schedule of the Combination (Criteria for Exemption of Combinations) Rules, 2024 is that the acquisition should be solely an Investment The benefit of Item 2Is normally available to the acquisition that Is for ordinary shareholding. The provision distinguishes this from the acquisition of strategic shareholding. The provision Is not applicable to Instances of acquisition of control.

Proviso (a) (b) and (0) to the explanation of item 2 respectively states that:

1. The acquirer does not gain representation (right or ability) on the board of directors (as a director or an observer).

2. The acquirer does not gain access (right or ability) to commercially sensitive information of the any enterprise.

3. The acquirer, its group entities, or affiliates are not engaged in overlapping or related business activities, such as:

• • Producing similar or substitutable products or services.
  • Operating in different levels of the supply chain (upstream Of downstream).
  • Offering complementary products or services.

Further, if the acquirer (or Its group entitles/affiliates) is engaged in any related activities (as mentioned in point 3 above), the acquisition is only considered “solely as an investment” If the acquirer does not hold 10% or more of the shares or voting rights after the acquisition.

Q.92 Is the acquisition of additional shares or voting rights by an existing shareholder (not holding more than 251‘) exempt from notification (item 3)? What conditions must be mat for the exemption to apply?

Ans. Forte exemption to apply, the following conditions must be satisfied:

1. The acquirer or its group does not gain control over the target enterprise.

2. The acquirer or its group does not gain (right or ability) board representation (as a director or an observer) for the first time.

3. The acquirer or its group does not gain access (right or ability) to commercially sensitive Information for the first time, except where board representation already exists.

4. If the acquirer or its group entities are engaged in related business activities (horizontal, vertical, orcomplementary to the target), then:

• • The Incremental shareholding of voting rights acquired In a single transaction or a series of interconnected transactions must not exceed 5% and
  • The acquisition must not increase the acquirer’s shareholding from less than 10% to 10% or more.

This exemption allows existing shareholders to incrementally increase their shareholding without triggering notice, as long as control Is not acquired, board representation does not change, and overlaps are limited within specified thresholds.

Q.93 Is an acquisition of additional shares or voting rights exempt if the acquirer already holds more than 25% but not more than 50% of the target enterprise (Item 4)?

Ans. Yes, an acquisition of additional shares or voting rights is exempt if:

• The acquirer Of its group already holds more than 25% but not more than 50% of the total shares or votl ng rights before and after the acquisition.
• The acquisition does not result in a change in control of the target enterprise.

Q.94 Is an acquisition of additional shares or voting rights exempt if the acquirer already holds more than 50% of the target enterprise (Item 5)?

Ans. Yes, an acquisition of additional shares or voting rights is exempt FP

• The acquirer or its group entities already hold more than 50% of the total shares or voting rights before the acquisition.
• The acquisition does not result In a change In control of the enterprise.

Q.95 Benefit of Item 5 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 is available to the acquirer if, prior to the acquisition, it has 50% or more shares or voting rights in the enterprise whose shares or voting rights are being acquired, except in cases where the transaction results in change In control. Whet If shareholding crosses 75%?

Ans. In this regard, voting rights in excess of 25%, confers joint control on the holder in relation to matters requiring special resolutions. However, as soon as the voting rights of a person move to 75% or more, such person acquires sole control over the matters requiring special resolution. Therefore, benefit of Item 5 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 would not be available In such cases,

irrespective of the fact that other shareholder(s) continue(s) to have certain contractual right conferring ability to materially Influence the Management and Affairs of Strategic Commercial decisions (MASC)of the company.

Further, in cases where, pursuant to understanding between shareholders and/or the subject enterprise, prior to the transaction, certain MASC of an enterprise is subject to Joint control, but one of the shareholders exerting joint control loses its ability to materially Influence, the other joint controller gains sole control over the MASC of the company. In such cases, benefit of item 5 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 would not be available. This would hold good irrespective of the fact that the person that gained sole control through understanding already held more than 75% shareholding and thus, sole control over special resolutions.

A. Some of the real-world scenarios where prior and post-transaction shareholding remains more than 50% but up to 75% are as follows:

a. Person A holds more than 50% but not more than 75% shareholding in CompanyX and Person B holds remaining shareholding. Person B does not hold any rights not available to an ordinary shareholder of a company (Special Rights). Person B sells part of Its shareholding in Company X to Person A, such that, post the transaction, Person A continues to hold more than 50% but not more than 75% shareholding in Company X, and Person B holds the remaining shareholding. Post-transaction, Person B continues to hold the remaining shareholding without any Special Rights.

b. Person A holds more than 50% but not more than 75% shareholding in Company X and Person B holds the remaining shareholding. In addition to its ability to block special resolution, Person B also holds Special Rights that are enough to exert material influence over the MASC of Company X. Person B sells part of its shareholding in Company X to Person A, such that post the transaction, Person A still holds more than 50% but not more than 75% shareholding in Company X and Person B continues to hold the remaining shareholding. Post transaction, the ability of Person B to materially influence the MASC of the Company X remains unchanged.

B. Some of the real-world scenarios where pre-transaction shareholding is more than 50% but upto 75% and post-transaction shareholding exceeds 75% are as follows:

c. Person A holds more than 50% but not more than 75% shareholding in CompanyX and Person B holds the remaining shareholding. Person B does not hold any Special Rights. Person B sells part of its shareholding in Company X to Person A, such that, post the transaction, Person A holds more than 75% shareholding in Company X and Person B holds the remaining shareholding. Post-transaction, Person B does not hold any Special Rights.

d. Person A holds more than 50% but not more than 75% shareholding in CompanyX and Person B holds the remaining shareholding. Person B does not hold any Special Rights. Person B sells the whole of Its shareholding In Company X to Person A.

e. Person A holds more than 50% but not more than 75% shareholding in CompanyX and Person B holds the remaining shareholding. In addition to Its ability to block special resolution, Person B also holds Special Rights that are enough to exert material influence over the MASC of Company X. Person B sells part of its shareholding in Company X to Person A, such that, post the transaction, Person A holds more than 75% shareholding in Company X and Person B continues to hold the remaining shareholding. Post-transaction, the ability of Person B to materially influence the MASC of the Company X either remains unchanged, with an exception that it cannot now block special resolutions, or gets diluted

f. Person A holds more than 50% but not more than 75% shareholding In Company X
and Person B holds the remaining shareholding. In addition to Its ability to block special resolutions, Person B also holds Special Rights that are enough to exert material influence over the MASC of Company X. Person B sells the whole of its shareholding in Company X to Person A;

C. Some of the various real-world scenarios where pre- and post- transaction shareholding exceeds 75%;

g. Person A holds more than 75% shareholding in Company X and Person B holds the remaining shareholding. Person B holds Special Rights that are enough to exert material Influence over the MASC of Company X. Person B sells part of Its shareholding in Company X to Person A, such that post the transaction, Person A holds more than 75% but not 100% shareholding in Company X and Person B continues to hold the remaining shareholding. Post transaction, ability of Person B to materially influence the MASC of Company X, through the Special Rights, remains unchanged.

h. Person A holds more than 75% shareholding in Company X and Person B holds the remaining shareholding. Person B holds Special Rights that are enough to exert material influence over the MASC of Company X. Person B sells part of its shareholding in Company X to Person A, such that, post the transaction, Person A holds more than 75% but not 100% shareholding and Person B holds the remaining shareholding. Post transaction, Person B does not hold any Special Rights.

h. Person A holds more than 75% shareholding in Company X and Person B holds the remaining shareholding. Person B holds Special Rights that are enough to exert material Influence over the MASC of Company X. Person B sells the whole of its shareholding in Company X to Person A

For the cases referred to in (d), (e), and (f) above, the benefit of Item 5 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 would not be available to Person Aas it gains sole control over matters requiring special resolutions.

For cases referred to in (h) and (i) above, the benefit of Item 5 of the Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 would not be available

to PersonAas it gains sole control pu rsuant to cessation of contractual arrangement.

For cases referred to in (a), (b) and (g) above, Person A does not gain sole control either on matters requiring special resolutions or otherwise. Thus, benefit of Item 5 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 can be availed for such cases.

Above are a few examples of the transaction scenario. Other scenarios may also result in change in control and accordingly, may not qualify for the benefit of Item 5 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024.

Q.96 Benefit of Item 5 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 is available to the acquirer If, prior to acquisition, it has 50% or more shares or voting rights In the enterprise whose shares or voting rights are being acquired, except in cases where the transaction results in change in control. Is the benefit of Item 5 available where a person does not acquire share or voting right but otherwise gains control?

Ans. In terms of Section 6(2) of the Act read with Section 5 and 2(a) of the Act, acquisition of shares, voting rights, assets or control is notifiable to the Commission if any of the financial thresholds prescribed under Section 5 of the Act are met and the transaction is not eligible for benefit of any of the exemption notifications issued under Section 54 of the Mt. Further, Section 6(7) of the Act read with Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 provides that certain transactions are exempt.

The benefit of Item 5 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024, subject to conditions specified therein, is available only in relation to the acquisition of shares and voting rights but not in relation to acquisition of control

Some of the real-world scenarios, where, prior to the transaction, a company is under Joint control of two shareholders and pursuant to the transaction, one of the shareholders loses its/their ability to exert material Influence, through contractual rights, over Company X, are as follows:

i. Person A holds more than 50% shareholding in Company X and Person B holds the remaining shareholding. Person B also holds rights that are enough to exert material influence over the MASC of Company X_ Person B sells whole of its shareholding in Company X to persons other than Person Ain a manner that such acquirer(s) does not hold any Special Rights.                               ii. Person A holds more than 50% but not more than 75% shareholding in Company X and Person B holds the remaining shareholding. In addition to Its ability to block special resolution, Person B also holds Special Rights that are enough to exert material influence over the MASC of Company X. Person A and Person B by mutual agreement agrees to terrninate the Special Rights of Person B.

iii.  Person A holds more than 75% shareholding In Company X and Person B holds the remaining shareholding. Person B holds the Special Rights that are enough to exert material influence over the MASC of Company X. Person A and Person B by mutual agreement agree to terminate the rights of Person B.

In all three scenarios mentioned above, there is a change in the ability of Person A to materially influence Company X (La, leading to a change in control). Accordingly, the benefit of Rem 5 is not available in respect of above-mentioned scenarios.

Q.97 One of the conditions for availing the benefit of Item 6 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 Is that acquisition of assets, stock-In-trade, raw materials, stores and spares, trade receivables and other similar current assets, as the case may be, should be in the ordinary course of business. In this context, what is meant by ordinary course of business?

Ans. The phrase “ordinary course of business” refers to frequent, routine and usual transactions, and therefore, the phrase corresponds to revenue transactions for competition law purposes. An acquisition of assets is exempt if it is carried out in the ordinary course of business and does not constitute an acquisition of a business itself.

An acquisition Is considered to be In the ordinary course of business tilt Involves acquiring:

• Stock-in-trade (inventory for resale);
• Raw materials (used for production);
• Stores and spares (Items used for maintenance and operations);
• Trade receivables (amounts due from custorners)or;
• Other similarcurrent assets that do not constitute an entire business.

[Please refer to order dated 11 May 2018 issued under Section 43A of the Act in relation to Combination Registration No. C-2017105/509]

Q.98 Is the acquisition of assets not directly related to the acquirers business or made solely as an investment exempt Mom 7)?

Ans. Yes, an acquisition of assets Is exempt If:

• The acquired assets are not directly related to the acquirer’s business activities.
• The acquisition Is made solely as an investment.
• The acquisition does not result in control over the enterprise whose assets are being acquired.

The exemption does not apply if:

• The acquired assets represent substantial business operations in a particular location orfor a particular product or service.
• The transaction effectively results In acquiring control over a business unit, even lithe assets are not organized as a separate legal entity.

Q.99 Is an acquisition of shares through a bonus issue, stock split, rights issue, or buyback exempt? When would such acquisitions require approval (Item 8)?

Ans. Yes, an acquisition of shares through the following corporate actions is exempt if it does not result In a change In control:

• Bonus Issue (Issuance of additional shares to existing shareholders).
• Stock split (division of shares into smaller units).
• Consolidation of face value (merging shares to increase their nominal value).
• Buyback of shares (company repurchasing its own shares).
• Subscription to a rights Issue (existing shareholders purchasing additional shares at a discounted price).
• If any of these transactions result in a change in control of the enterprise, it shall require notification. For example:
• if a shareholder’s voting rights significantly Increase due to a disproportionate rights issue or buyback that results into change in control.
• If the acquirer gains new rights or influence (enough to exert material influence) over decision-making in the company.

Q.100 The condition for availing benefit of item 8 of the Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024Is that acquisition of shares or voting rights pursuant to a bonus !SSW or stock spitts or consolidation of face value of shares or buyback of shares or subscription to rights Issue of shares (say Corporate Action) should not lead to change in control. Would the benefit of this Rem be available in the following circumstances?

– Pre-corporate action shares or voting rights percentage Is less than 25% and post-corporate action Is likely to exceed 25%;

– Pre-corporate action shares or voting rights percentage Is less than 50% and post-corporate action Is likely to exceed 50%; or

-Pre-corporate action shares or voti ng rights percentage is less than 75% and post-corporate action is I !key to exceed 75%.

Ans. One of the conditions for availing the benefit of the Item 8 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 Is that the corporate action should not lead to change in control. Whether any of the corporate actions lead to change in control or not, Inter alle, depends on the facts of the case, status and Inter-se relation of the parties and shareholders.

Share holding htoting rights in excess of 25% confer joint control on the holder in relation to matters requiring special resolutions. Similarly, shareholding/voting rights In excess of 50% confer sole control on the holder in relation to matters requiring ordinary resolutions.

Thus, irrespective of the other facts of the case, when shareholding/voting rights move from less than 25% to more than 25%, the share tvotIng right holder acquires Joint control over the matters requiring special resolution leading to change in control. Similarly, when shareholding/voting rights move from less than 75% to more than 75%, share/voting right holder acquires sole control over the matters requiring special resolution leading to

change In control. Further, when shareholding Noting rights move from less than 50% to more than 50%, share/voting right holder acquires sole control over the matters requiring ordinary resolution leading to change in control.

Thus, In the circumstances Illustrated In the query, the benefit of Item 8 would not be available. These are the illustrations and, in any circumstance, if a corporate action leads to acquisition of control /change In control, benefit of Item B of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 would not be available.

Q101 A condition for availing the benefit of Item 8 of the Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 20241s that acquisition of shares or voting rights should be pursuant to a bonus Issue or stock splits or consol idatIon of face value of shares or buyback of shares or subscription to rights Issue of shares (say corporate action) and it should not lead to change In control. Would the benefit of this item be available in the following circumstances?

– A person gaining control (Gainer of Control) because it is not participating in buyback;

– Gainer of Control is gaining control because it la not participating In buyback to the full extent of his entitlement;

– Gainer of Control Is gaining control because It is subscribing to the rights Issue in excess of Its entitlement;

– Gainer of Control is gaining control because it got the right entitlement renounced in Its favour,

– Gainer of Control is gaining control because other right entitlement holders are not subscribing to the right issue.

Ans. One of the conditions for availing the benefit of Rem 8 of the Competition (Criteria for Exemption of Combinations) Rules, 2024 is that the corporate action does not lead to change In control. For the purpose of Item 8 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024, the essential test is whether or not the corporate action is leading to change in control. It is immaterial whose action or inaction in the corporate action would lead to change In control. Thus, In the circumstances Illustrated In the query, the benefit of Item 8 would not be available. These are the illustrations and, in any circumstance, If a corporate action leads to change In control, the beneritt of Item 8 of Schedule of the Competition (Criteria for Exemption of Combinations) Rules, 2024 would not be available.

Q.102 Inn Infra-group acquisition of assets exempt from CCI notification? When would an I ntra-group acquisition of assets require CCI approval (item 11)?

Ans. Yes, an acquisition of assets within the same group is exempt, if it does not result in a change In control over the acquired assets.

The exemption does not apply if:

• The transaction results In a change In control over the acquired assets within the group.
• The restructuring leads to a shift in decision-making power over the assets to a different entity or management structure.

Q.103 Is an intra-group acquisition of shares exempt from notification? When would an Intra-group acquisition of shares require notification?

Ans. Yes, an acquisition of shares within the same group is exempt if it does not result in a change in control.

Q.104 Is a merger or amalgamation within the same group exempt from notification? When would an Intra-group merger oramalgamation require notification? Mom 10]

Ans. Yes, a merger or amalgamation between enterprises within the same group is exempt from notification If It does not result in a change in control.

The exemption does not apply if:

• The transaction results in a change In control over the merged or amalgamated entity.
• The restructuring leads to a shift In decision-making power to an external entity or a different management structure.

Q.105 Is a demerger and the Issuance of shares by the resulting company exempt from notification? [Item 12]

Ans. Yes, a demerger and the issuance of shares by the resulting company Is exempt If:

• The shares are issued to the demerged company or its shareholders in proportion to their existing shareholding before the demerger.
• The transaction does not involve a change in control.
• The issuance of shares excludes the discharge of consideration for fractional shares (which may be settled In cash or other means).

Demerger transactions where shares are issued in proportion to existing shareholding are exempt, as long as they do not result in a change in corrtrol over the resulting company.

E. Pre-Filing Consultations (PFC)

106. Who can approach CCI for pre-tiling consultation prior to making a filing?

Ans. Parties Intending to file a notice with CCI can approach It for an Informal pre-filing consultation in case of any doubts/queries. The advice provided by the officers of the Commission during PFC is neither binding on the Commission or the person seeking PFC. A detailed PFG note is available at  https://cci.gov.intimagesicombinationprefilling consutt Edionien/ofo-guidence-note1651833652.01

107. How can parties seek certain clarifications on the filing procedures interpretation of th• Act and Combination Regulations 2024? What is the procedure for requesting a pre-filing consultation?

Ms. A request for pre-filing consultation on substantive Issues should be made by the parties intending toffie a notice at the earliest and at least 10 days before the intended date of filing to allow time for allocating a case team for the pre-filing consultation.

A pre-filing consultation is also provided on interpretational issues relating to Sections 5 and 6 of the Act, Combinations Regulations 2024 and Rules. In such cases, a request for pre-filing consultations must be sent at least 5-7 days before the meeting is requested to be ached u led.

The email seeking pre-filing consultation may be sent only to the following email Id: ocl-consult@nic.in

108. What details/documents need to be provided for seeking pre-filing consultation on interpretational issues?

Ms. The parties may request a pre-filing consultation on interpretational issues. They are required to provide complete and sufficient details regarding the facts of the case, including the sector, relevant market, legal provisions, decisional practices of CCI and of other jurisdictions (if available and material to the facts of the case).

109. Can the parties also discuss a draft Form UFormliwith CCI before making a filing?

Ms. Yes, a copy of the draft application comprising Form Lill, as the case may be, and supporting documents can be forwarded for discussion with the request for scheduling a pre-filing consultation. However, a request for such pre-filing consultation should be made by the parties at least 10 days before the intended date of filing to allow time for allocating a case team and enabling the case team to go through the draft form.

110. I require certain clarifications on the filing procedures/Interpretation of the Act and Combinations Regulations 2024. Can I contact CCI before making a filing? Can I also discuss a draft Form I with CCI before making a filing?

Ans. Parties intending to file a notice with the CCI are encouraged to approach CCI for an Informal profiling consultation In case of any doubts/queries. However, the advice provided by the officers of the Commission during PFC is nether binding on the Commission orthe person seeking PFC.

A request for pre-filing consultation on substantive Issues should be made by the parties intending to file a notice at the earliest and at least 15 days before the intended date of filing to allow time for allocating a case team for the pre-filing consultation. A copy of the draft application comprising Form WI, as the case maybe, and supporting documents should be forwarded along with the request for scheduling a pre-filing consultation. For further details, please referto the information on pre-filing consultation on the CCI website.

In addition to the above, CCI also provides pre-filing consultations on interpretational Issues relating to Sections 5 and 6 of the Act, Combinations Regulations 2024 and Rules. In such cases, a request for pre-filing consultations must be sent at least 5-7 days before the meeting is requested to be scheduled. Complete and sufficient details regarding the facts of the case, including the sector/relevant market, legal provisions, decisional practices of the CCI and of other jurisdictions (If available and material to the facts of the case) should be provided in the request for pre-filing consultations on interpretational issues.

The email seeking pre-tiling consultation may be sent only to the following email Id: col-consuMnic.in with the subject ‘Request for pre-filing consultation on interpretational Issues”.

F. Filing Notices of Combinations

111. How do parties to the combination decide which form needs to be filed for notifying to CCI?

Ms. Notifying parties have the discretion to file a notice either using Form I or Form II, as set out In Schedule I of the Combinations Regulations 2024. However, In the following cases, a notice should preferably be given in Form II:

(a) the parties to the combination are engaged in production, supply, distribution, storage, sale or trade of similar or Identical or substitutable goods or provision of similar or identical Of SU bstihrtable services, and the combined market share of the parties to the combination after such combination Is more than fifteen percent (15%) In the relevant market;

(b) the parties to the combination are engaged at different stages or levels of the production chain in different markets in respect of production, supply, distribution, storage, sale or trade In goods or provision of services, and their Individual or combined market share is more than twenty-five per cent (25%) in the relevant market

Note: The parties to the combination shall give notice in Form I or Form II, as the case may be, in accordance with the notes to Form I/Form II issued by the Commission and published on its official website from time to time.

In cases where the pales to the combination have flied a notice In Form I and the Commission requires information in Form II to form its prima facie opinion as to whether the combination is likely to cause or has caused an AAEC within the relevant market, the Commission shall direct the parties to the combination to file a notice in Form II. However, the fee already paid while giving notice in Form I shall be adjusted against the fee payable for giving notice In Form II If such notice Is given within a period of forty-fire days from the date of communication of the decision of the Commission. (Please see regulation 5 of Combinations Regulations 2024)

112. What documents should be filed along withthe notice In Form I?

Ans Ms  Generally, the following documents need to be filed along with the notice (in Form I):

(a) Certified copy of the authorization in favour of a person signing the notice in the prescribed format.

(b) Copy of proof of payment of filing fee.

(c) Copies of approval of the proposal relating to merger/amalgamation and/or agreement/other documen texecuted In relation to the acquisition or acquiring of control.

(d) An authorization letter in favour of a person located in India who is authorised to receive communication(s) on behalf of the notifying party(ies)from CCI.

(e) Copies of the most recent annual report and accounts of the parties to the combination. Where, the previous year% annual report Is not available, copies of the most recent annual reports and accounts of the parties to the combination shall be submitted.

(f)  In accordance with sub-regulation (2) of Regulation 13 of the Combinations Regulations 2024, the summary (not more than 1000 words) to be filed with the Commission must not contain any confidential information. The said summary will be published on the websIte of the Commission.

(g)  M affidavit In support of the request for confidentiality as specified In Regulation 42 of the Competition Commission of India (General) Regulations, 2024.

However, it may be noted that this Is not an exhaustive list of documents to be flied with the notice and, depending on the nature of the combination, other documents may also be required to be flied.

In Amazon.com NV Investment Holdings LLC [C-2019/09/688 available at https:

www.cci.gov.inlcombinationlorderldetailslorderl113810], it was observed `… Item 8.8 of Form I, which requires a notifying party to furnish documents, material (including reports, studies, plan, latest version of other documents), etc. considered by and/or presented to the board of directors and/or key managerial person of the parties to the combination and/or their relevant group entitles, In relation to the proposed combination. The purpose of this requirement is to understand the commercial and economic contours of the given combination In addition to the legal contracts submitted astrigger documents against Item 8.7 of Form I. True and complete disclosure against Item 8.8 enables the Commission to determine the appropriate framework forcompetition assessment of the Combination”.

For reference, please visit the link for ‘Form and Notes to Form”: httos://cci.gov.in/ combination/combinationifiling-of-combination-notice/fomi

113. Is there any fee to be paid for filing the notice?

Ms. As of now, the parties who wish to file Form I shall pay Rs. 30,00,000 and parties who wish to file a notice in Form II shall pay Rs. 90,00,000. This may be revised by a notification.

In cases where the parties have filed the notice In Form I and the Commission directs the parties to file notice in Form II, a residual fee is chargeable.

[For further reference, please see proviso to Regulation 5(6) of the Competition Commission of India Combinations Regulations, 2024]

114. How does a Party notify a combination to CCI?

Ms. The notice in respect of a combination is required to be filed in original, along with one (1) copy, and an electronic version thereof, with the registry of CCI. The notice should be complete in all respects (must be filed in required format) and accompanied by filing fees. (See Regulation 13 of the Combinations Regulations 2024).

In the event that the parties are claiming confidentiality on certain Information provided by them in the notice, a public version of the notice, and an electronic version thereof, is also required to be filed (See proviso to Regulation 13(1) of the Combinations Regulations 2024).

The notice must also be accompanied by a summary of the combination, in not more than 1000 words, as required In terms of Regulation 13(2) of the Combinations Regulations, 2024 along with separate electronic copies thereof. This is for the purpose of publishing the same on the website of the Commissbn.

115. Does CCI provide the facility of e-fillng?

Ms. The a-filing facility is currently not available. However, to facilitate the notifying parties, filing through email Is permitted, and parties are required to provide the soft copy of Notice and Annexures as an attachment or a link in the email. Further details may be obtained from the Combination Registry, CCI.

116. If a combination Involves a aeries of steps, can the parties file a single notice?

Ms. Where the ultimate intended effect of a business transaction is achieved by way of a series of steps or smaller individual transactions which are inter-connected, one or more of which may amount to a combination, a single notice covering all these transactions shall be filed by the parties to the combination.

Please note that the requirement of filing a notice shall be determined with respect to the substance of the transaction, and any structure of the transaction(s) comprising a combination that has the effect of avoiding notice in respect of the whole or a part of the combination shall be disregarded.

(Please see Regulation 9(4) and 9(5) of Combinations Regulations, 2024)

Some of the decisions in which CCI has treated multiple transactions as inter-connected steps of a single combination are: Sapphire FoodiVum! India, Case No.C-2015/071290, Koneru Holdings Limited; Case No.C-2015/101329, Baramati Speciality Steels/Kalyani Invesirnent/KSL Holdings; and Case No.C-2015/10/334, Blue Star Lim/cad/Blue Star I nfotech Limited/Blue Star Infotech Business Intelligence and Analytics Private Limited.

The Honible Supreme Court in CCI v. Thomas Cook (India) Ltd. & An r. [Civil Appeal No. 13578 of 2015, dated April 17, 2018] reiterated the Commission’s findings that the scheme, market purchases and other transaction were inter-connected transactions or steps with the same ultimate effect, therefore being a part of the single composite combination. Further, the Montle Court held that the combination comprised an entire series of transactions/steps and not a single transaction on a standalone basis. The landmark j udgment also stated that market purchases were not independent and could not be used In Isolation forthe purpose of any exemption.

In Amazon.corn NV Investment Holdings LLC [C-2019/091668, available at httos:

ww.v.cci.gov.in/combination/order/detaileJorder/1138/0], it was observed Regulation 9(4) of the Combination Regulations 2024 states that ‘Where the ultimate intended effect of a business transaction is achieved by way of a series of steps or smaller individual transactions which are interconnected, one or more of which may amount to a combination, a single notice, covering all these transactions, shall be filed by the parties to the combination’. This provision makes it mandatory for parties to the combination to give one notice covering all inter-connected steps of their proposed combination. Further, Regulation 9(6) of the Combinations Regulations 2024 stipulates that The requirement of filing notice under Regulation 5 of these regulations shall be determined with respect to the substance of the transaction and any structure of the transaction(s), comprising a combination, that has the effect of avoiding notice in respect of the whole or a part of the combination shall be disregarded.

117. Which parties are required to file the notice?

Ms. In case of acquisitions, the acquirer is required to file the notice. In case of Merger &Amalgamation, Merging/Amalgamating parties are required to jointly file the notice.

[See Regulations 9(1), 9(2) and 9(3) of the Combinations Regulations 2024 as well as Regulation 11 of CCI (General Regulations), 2024].

118. Does CCI grant confidentiality over Information that has been submitted In a notice? How is a confidentiality request made over documents filed with CCI?

Ans Ms. In line with best practices, CCI treats all documents as confidential in terms of and subject ba the provisions of Section 57 of the Act in this regard, the notifying parties are required to submit a request for confidential treatment to the Information flied by them. Such request can only be made if making public of such information or parts thereof will result in disclosure of trade secrets or destruction or appreciable diminution of the commercial value of any information or can be reasonably expected to cause serious injury.

[See Regulations 13(1) of the Combinations Regulations 2024; Regulations 36 of the General Regulations 2024 and Section 57 of theAct].

119. After filing of a notice, can the parties Inform CCI of any changes In the Information provided in the notice?

Ms. Yes, the parties are required to Inform CCI of any change In the Information provided In the notice to CCI within 10 working days from the date of issuance of acknowledgement by Secretary under Regulation 15. If the change in the information provided in the notice is likely to significantly affect the factors for the determination of AAEC Or CCI’s assessment

of the combination, CCI may treat the notice filed as not valid after recording reasons.

Please note that no additional fee shall be payable if a notice Is tiled again by the parties within a period of 45 days from the date of communication of the decision of the Commission [See Regulation 15 of the Combinations Regulations 2024].