Government Mandates New Competition Law Thresholds for M&As

On Monday, the government announced new competition law provisions requiring companies to seek the Competition Commission of India's approval for mergers and acquisitions exceeding Rs 2,000 crore, if the target company has substantial business operations in India. The amendments aim to align India's regulatory framework with global standards and enhance scrutiny over digital mergers.

The government on Monday mandated new provisions under the competition law, compelling companies to obtain approval from the Competition Commission of India (CCI) for mergers and acquisitions surpassing Rs 2,000 crore, provided the target has significant business operations in India.

Notifications released by the Corporate Affairs Ministry indicate that CCI's approval will now be a requisite for deals within the digital sector. This move seeks to allow the fair trade regulator to closely monitor M&As that previously evaded oversight due to lower asset or turnover definitions.

Vaibhav Choukse, Partner at JSA, highlighted that this major overhaul introduces a deal value criterion, aligning CCI with international regulators such as those in the US, Germany, and Austria. Nisha Kaur Uberoi, Chair of Competition Law at JSA, emphasized that the changes are the most significant yet for the Indian merger control regime, a necessary step to maintain the ease of doing business while ensuring comprehensive scrutiny.

(With inputs from agencies.)