Big corporate houses in India may not have to live under fear of having to seek the competition watchdog’s approval for every small merger or acquisition in India or abroad. The Competition Commission of India (CCI) is now planning to set a turnover limit of Rs 600 crore and asset-size limit of Rs 200 crore separately for both the acquiring and target company in an M&A deal. While this does help big corporates, it will bring all mid-sized M&A deals under the regulatory ambit.
At present, Section 5 of the Competition Act, 2002, specifies that post M&A, if the combined entity has total assets of Rs 1,000 crore or a turnover of Rs 3,000 crore, the deal will need the CCI’s nod. This would have meant that big companies with turnovers of close to and over Rs 3,000 crore would have to knock at the doors of CCI even if the target entity had a miniscule turnover of say, Rs 50 crore.
