Provisions of Combination under Competition Act, 2002

Relevant Sections: Section 5 & 6 under the Competition Act, 2002.

What is Combination?

Section 5 of the Competition Act, 2002

Combination means-

The acquisition of One or more enterprise by one or more persons, or

Merger or Amalgamation of enterprise shall be a combination of such enterprises and persons or enterprises, if-

Situation 1. Any acquisition where–

I. the parties to the acquisition, being the acquirer and the enterprise whose control, shares, Voting rights or assets have been acquired or being acquired jointly have,

Acquire in India	Value of the Assets	More than 1000 Cr.
	Turnover	More than 3000 Cr.

 –

Acquire in or outside India	Value of the Assets	More than 500 Million USD
	Turnover	More than 1500 Million USD

ii. The Group, to which the enterprise whose control, shares, assets or voting rights have been acquired or are being acquired, would belong after the acquisition, jointly have or would jointly have,

Acquire in India	Value of the Assets	More than 400 Cr.
	Turnover	More than 12000 Cr.

 –

Acquire in or outside India	Value of the Assets	More than 2 billion USD
	Turnover	More than 6 billion USD

Situation 2

Acquisition of control by a person over an enterprise when such person has already 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, in

I. The enterprise over which control has been acquired along with the enterprise over which the acquirer already have direct or indirect control directly.

Acquire in India	Value of the Assets	More than 1000 Cr.
	Turnover	More than 3000 Cr.

 –

Acquire in or outside India	Value of the Assets	More than 500 Million  USD
	Turnover	More than 1500 Million USD

II. The group, to which enterprise whose control has been acquired, or is being acquired, would belong after the acquisition, jointly have or would jointly have-

Acquire in India	Value of the Assets	More than 400 Cr.
	Turnover	More than 12000 Cr.

 –

Acquire in or outside India	Value of the Assets	More than 2 billion USD
	Turnover	More than 6 billion USD

Situation 3: Any merger or amalgamation in which-

I. The enterprise remaining after merger or the enterprise created as result of the amalgamation, as the case may be, have

Either in India	Value of the Assets	More than 1000 Cr.
	Turnover	More than 3000 Cr.

 –

In or outside India	Value of the Assets	More than 500 Million  USD
	Turnover	More than 1500 Million USD

II. The group, to which the enterprise remaining after the merger or the enterprise created as a result of amalgamation, would belong after the merger or the amalgamation, as the case may be, have or would have,

Either in India	Value of the Assets	More than 400 Cr.
	Turnover	More than 12000 Cr.

 

In or outside India	Value of the Assets	More than 2 billion USD
	Turnover	More than 6 billion USD

Section 6: Regulation of Combinations

1. No person or enterprise shall enter into a combination which cause or is likely to cause an appreciable adverse effect on the competition within the relevant market in India and such a combination is shall be void.

2. Prior Notice to Competition Commission of India

a. Any Person or enterprise who or which proposes to enter into a combination may at his or its own, give notice to CCI,

b. in the form as may be specified, and the fees which may be determined, by regulations, disclosing the details of the proposed combination, with 7 days of-

i. approval of proposal relating to merger or amalgamation, the situation as referred in section 5 of the Act.

ii. execution of any agreement or documents for acquisition referred to in section 5 of the Act.

3. After receipt of the notice the CCI shall dealt with notice.

4. The provisions of this sections shall not apply in the following situation-

i. Share subscription, or

ii. financial facility, or

iii. any acquisition, by public financial institution, foreign institutional investor, bank, venture capital funds pursuant to any covenant of a loan agreement or investment agreement.

5. the institution or banks mentioned in clause (4) shall give a notice in form as specified the regulators, within seven days of the acquisition including the details of control to the  CCI.