Media Briefing Note: Indian Merger Control Regulations
01 June 2011
LONDON, 01 June 2011 - India's merger control regime comes into effect from today, Wednesday 1 June 2011.
The Ministry of Corporate Affairs in India has published four notifications that The Competition Commission of India has now notified. The following features of the Regulations are particularly significant:
- transactions will not be subject to the Indian merger regime if, in the case of mergers and acquisitions, they were approved by each party's board of directors before 1 June 2011 and, in the case of acquisitions, binding documents were entered into before 1 June 2011;
- more transactions are now exempt from filing, including inter-group acquisitions and transactions taking place entirely outside India with insignificant local nexus and effect on markets in India;
- short form filing is the norm but long form filing may be used at the parties' election and must be used when requested by the Competition Commission of India (CCI).
Mathew Levitt, partner in Hogan Lovells' Brussels Antitrust, Competition and Economic Regulation practice, said:
"The Regulations have resolved some of the problems and uncertainties created by the previous Draft Regulations, not least by providing that filing is not required in respect of certain everyday transactions and those with little connection to India. They also bring more certainty for companies involved in transactions that will not complete before 1 June 2011 but that have already progressed beyond certain stages. A number of questions remain, however, including the circumstances regarding the notifiability of minority share acquisitions and joint ventures, the Indian nexus requirement, and the CCI's resources and its ability to review notification within the initial 30 day period."
John Pheasant, partner in Hogan Lovells' London Antitrust, Competition and Economic Regulation practice, added:
"The Regulations have changed the notification position significantly. Although these changes to the notification process should reduce the burden of making notifications for the combining parties, there remains uncertainty. This uncertainty may be hard to resolve given that informal consultation with the CCI, which was proposed in the earlier Draft Regulations, has been omitted from the Regulations. However, the CCI has said that it will make adequate provision for informal pre-notification discussions."
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