Government Revises Merger Control Thresholds

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In a significant move, the Ministry of Corporate Affairs, Government of India (“MCA”), by way of 2 (two) separate notifications both dated March 07, 2024, has enhanced the value of asset and turnover thresholds under (i) Section 5 of the Competition Act, 2002 (“Competition Act”) by 150%; and (ii) De Minimis/ Small Target Exemption.

The Competition Act requires mandatory notification to, and prior approval of, the Competition Commission of India (“CCI”) for transactions which exceed the ‘jurisdictional thresholds’ prescribed under Section 5 of the Competition Act (“Section 5 Thresholds”).

Further, the MCA, by way of notification dated March 16, 2022 read with the notification dated March 29, 2017, has exempted a combination from requiring notification to, and approval from, the CCI, if the target enterprise, on a consolidated basis, has either assets of the value not exceeding INR 350 crores (USD 42.09 million in India or turnover not exceeding INR 1,000 crores (USD 120.25 million in India (“De Minimis Exemption Thresholds”).

The revised Section 5 Thresholds and the De Minimis Exemption Thresholds are as under:

De Minimis Exemption

The notification reiterates that in case a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated with another enterprise, then the asset value and turnover of the relevant asset (mentioned above), will be taken into consideration for applying the De Minimis Exemption Thresholds. These thresholds are valid for  2 (two) years.

Section 5 Thresholds

(Source: Notifications dated March 07, 2024)

This Prism has been prepared by:

Vaibhav Choukse Partner & Head of Practice (Competition Law)

Ela Bali Partner

Nripi Jolly Senior Associate

For more details, please contact [email protected]