The Thresholds
A combination requires CCI approval where it crosses the asset or turnover thresholds prescribed under the Competition Act. The deal value threshold (DVT) of ₹2,000 crore, operational from 10 September 2024, applies where the deal value exceeds ₹2,000 crore and the target has substantial India operations (10% or more users, revenue, or GMV from India). The de minimis exemption is available where the target has assets in India of not more than ₹4.5 billion or Indian turnover of not more than ₹12.5 billion.
The NCLT Sequencing
The CCI approval must be obtained before the NCLT sanctions the scheme. The NCLT’s scheme jurisdiction does not displace the competition law requirement, and a scheme that is sanctioned without CCI approval is vulnerable to challenge. In the IBC context, the Supreme Court has clarified that CCI approval must be mandatorily obtained before the NCLT application for approval of the resolution plan. The same sequencing discipline applies to scheme mergers.
The Exemption for IBC Resolution Plans
The MCA’s 2024 notification exempted certain combinations from CCI scrutiny in the IBC context, and the NCLAT has upheld the exemption. The exemption is specific to resolution plans and does not extend to all scheme mergers. A scheme that is not an IBC resolution plan must independently assess the CCI threshold.
The Practical Planning
The CCI analysis should be undertaken at the scheme design stage. The parties should compute the asset, turnover, and deal value thresholds, determine whether the target has substantial India operations, and assess the availability of the de minimis exemption. A CCI filing that is made after the NCLT first motion is likely to delay the scheme.
Call to Action: For CCI threshold computation, DVT analysis, or NCLT–CCI sequencing strategy, contact office@anujdesaiassociates.com or 9619456656. Website: https://anujdesaiassociates.com. LinkedIn: linkedin.com/in/ca-anuj-desai-122547230.