The Ministry of Corporate Affairs has relaxed the timeline prescribed for filing of mergers with the Competition Commission of India (CCI)..Under Section 6 of the Competition Act, 2002, any combination (as defined under Section 5) has to be reported to the CCI within 30 days of approval of the proposal relating to the merger or execution of any agreement/documents which will effectuate such merger/acquisition..This may be viewed as a breather for entities proposing to be merged since this ‘notice’ that must be filed with the CCI requires preparation of exhaustive documents, which demand careful preparation and therefore, 30 days often prove too short to provide adequate information..However, the 30 day timeline has simply been removed without providing for a further relaxed deadline, which would mean that businesses can now take as long as they wish to do the filing – but of course it would be in their best interests to do it as soon as possible..While the luxury of time has now been afforded to the the parties proposing to be merged, the CCI continues to tackle with the 210 day deadline for passing the order. India is (possibly) the only jurisdiction where the anti trust regulator is required not just to identify the concerns, but to propose modifications also- a task which typically addressed by notifying parties..This is the second relaxation this year for combination filings with the CCI, with the first one being the relaxation of ‘applicability requirements’ i.e. the monetary thresholds prescribed under Section 5..Prior to the notification, the norm was that the assets or turnover of the entire resulting group/entity would be taken into account. Now, the assets or turnover of only the unit or the business sought to be merged or acquired will be taken into account..(Read the notification)
The Ministry of Corporate Affairs has relaxed the timeline prescribed for filing of mergers with the Competition Commission of India (CCI)..Under Section 6 of the Competition Act, 2002, any combination (as defined under Section 5) has to be reported to the CCI within 30 days of approval of the proposal relating to the merger or execution of any agreement/documents which will effectuate such merger/acquisition..This may be viewed as a breather for entities proposing to be merged since this ‘notice’ that must be filed with the CCI requires preparation of exhaustive documents, which demand careful preparation and therefore, 30 days often prove too short to provide adequate information..However, the 30 day timeline has simply been removed without providing for a further relaxed deadline, which would mean that businesses can now take as long as they wish to do the filing – but of course it would be in their best interests to do it as soon as possible..While the luxury of time has now been afforded to the the parties proposing to be merged, the CCI continues to tackle with the 210 day deadline for passing the order. India is (possibly) the only jurisdiction where the anti trust regulator is required not just to identify the concerns, but to propose modifications also- a task which typically addressed by notifying parties..This is the second relaxation this year for combination filings with the CCI, with the first one being the relaxation of ‘applicability requirements’ i.e. the monetary thresholds prescribed under Section 5..Prior to the notification, the norm was that the assets or turnover of the entire resulting group/entity would be taken into account. Now, the assets or turnover of only the unit or the business sought to be merged or acquired will be taken into account..(Read the notification)
