New Merger Thresholds Introduced for Fair Competition

The government has introduced new provisions under the competition law that mandate companies to seek the Competition Commission of India's (CCI) approval for mergers and acquisitions beyond specific deal value thresholds. This includes deals exceeding Rs 2,000 crore with substantial business operations in India. The move aims to better regulate such transactions, especially in the digital sector.

The government on Monday implemented new provisions under the competition law, requiring companies to obtain the Competition Commission of India's (CCI) approval for mergers and acquisitions beyond certain deal value thresholds.

Notably, CCI's clearance will also be needed if the target company has significant business operations in India, according to notifications from the corporate affairs ministry.

This move is expected to enable the fair trade regulator to closely monitor mergers and acquisitions in the digital sector. Vaibhav Choukse, Partner at JSA, highlighted that the new criterion mandates CCI approval for transactions exceeding Rs 2,000 crore in value, provided the target has substantial operations in India. The decision addresses previous limitations where certain digital transactions escaped review due to falling below asset or turnover thresholds.

(With inputs from agencies.)