Merger Control 2020

Last Updated July 13, 2020


Trends and Developments


J Sagar Associates is a leading full-service national law firm with over 300 professionals operating out of eight offices, in Ahmedabad, Bengaluru, Chennai, Gujarat International Finance Tec-City (GIFT), Gurugram, Hyderabad, Mumbai and New Delhi. The JSA competition team comprises ten lawyers, including two partners, and offices in New Delhi and Mumbai. The team advises on all aspects of the Indian competition regime, including multinational merger approvals, cartels (including leniency), abuse of dominance, compliance and other areas of antitrust litigation. The team’s expertise spans a wide variety of sectors. Recently, JSA secured the Competition Commission for India’s approval for the formation of a joint venture between Ford Motor Company and Mahindra & Mahindra Limited and sale of the automotive business of Ford India Private Limited to the said joint venture.


The Competition Act 2002 (Competition Act), in conjunction with the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations 2011 (Combination Regulations), and notifications issued by the Ministry of Corporate Affairs (MCA), govern the merger control regime in India. The Competition Commission of India (CCI) carries out ex-ante review of transactions proposed to be undertaken to ensure that these do not harm competition, the touchstone being an appreciable adverse effect on competition in India (AAEC). The merger control regime in India was introduced on 1 June 2011 by bringing into effect Sections 5 and 6 of the Competition Act.

Under Section 6 of the Competition Act, all "combinations" require prior approval of the CCI. A "combination" means the acquisition of control, shares, voting rights or assets, or a merger or amalgamation exceeding the "thresholds" prescribed under Section 5 of the Competition Act. However, a combination does not require approval if it is exempt under the Combination Regulations or other government notifications. Given that the Competition Act requires mandatory notification to the CCI and provides for a 210-day suspensory regime from the date of notifying the CCI, the parties cannot consummate the combination or any part thereof prior to receiving approval of the CCI or until the lapse of 210 days.

As the CCI evolves, it demonstrates its maturity in its approach to dealing with cases under the Insolvency and Bankruptcy Code 2016 (IBC), newly introduced Green Channel Route (GCR) and complex combinations such as Reliance Industries/DEN Networks, Hathway Cable, ZF Friedrichshafen AG/WABCO Holdings, TRIL Urban Transport, Valkyrie Investment, Solis Capital (Singapore)/GMR Airports, GlaxoSmithKline/Pfizer, Ford Motor Company/ Mahindra & Mahindra and Kia Motors Corporation/Hyundai Motors Company, ANI Technologies. Unlike in 2018, most combinations were approved unconditionally, while a few required minor modifications, and only one resulting in the appointment of a monitoring agency.

To date, the CCI has reviewed approximately 740 merger notifications, over 110 since January 2019, out of which 81 were notified under the regular Form I (short form), 12 under the GCR Form I and 17 under Form II (long form). Five combinations were approved with behavioural remedies (referred to as "modifications" under the Competition Act).

Over 95% of the notified transactions have raised no competition concerns and were approved without further ado. In a small number of cases – around 36 to date – some form of modification has been required to secure approval. The CCI’s average review time to assess a notifiable transaction has reduced to approximately 18 working days in 2019 from 23 working days in 2018. No combination has been prohibited to date.

Key Changes in the Law

Amendments to the Combination Regulations

The year 2019 has witnessed two amendments to the Combination Regulations in quick succession.

On 15 August 2019, the CCI introduced a provision for fast-track approval of combinations that do not involve any form of overlap (namely, horizontal, vertical or complementary) between the business activities of the parties. Such combinations would qualify for the GCR (August Amendment). The assessment of overlaps need to be assessed vis-à-vis: (i) the parties; (ii) their group companies; and (iii) companies in which parties directly or indirectly hold shares or exercise control. Such a combination would be deemed to have been approved upon receipt of an acknowledgment of the filing of the GCR Form I along with the prescribed declaration, and the parties can proceed to consummate the proposed combination. 

However, if the CCI then takes the view that the said combination does not actually qualify for the GCR, such approval shall be held void ab initio after affording the parties an opportunity to be heard. The CCI would then proceed to assess the combination in accordance with the provisions of the Competition Act.

The success of the GCR procedure is apparent from the fact that since its very recent introduction, 12 combinations have already availed the benefit of the fast-tracked approval.

Another notable feature of the August Amendment was the amendment of Form I (Revised Form I) to seek certain additional information, which now includes details of (i) market facing information, namely, market size, market share of the parties as well as its competitors for the last three years; (ii) all plausible alternative relevant market definitions with detailed explanations; (iii) complementary activities provided by the parties; and (iv) foreign investment.

Subsequently, on 30 October 2019, the CCI enhanced the filing fee which is payable along with the merger notification to the CCI from INR1.5 million (USD 19,629) to INR2 million (USD 26,172) for notification in Form I and; and INR5 million (USD 65,429) to INR6.5 million (USD 85,057) for notification in Form II.

Revision of guidance notes to Form I

To clarify the scope of information required to be submitted along with the Revised Form I, the CCI published a revised guidance to its notes to Form I  on 27 March 2020 (Guidance Note).

The Guidance Note, inter-alia, provides clarity on the (i) definition of complementary activities, to include those products/services that are related and are used together (eg, printers and ink cartridges); and (ii) details of special rights acquired pursuant to a combination, including affirmative/veto rights, information rights and the acquisition of any other rights or advantages of commercial nature. Further, it clarifies that market facing information needs to be provided for three years only where the parties have a combined market share of 10% or more in any of the defined relevant markets.

Exemption for Banking Companies

In the backdrop of the recent banking crisis in India, on 11 March 2020, the  MCA issued a notification exempting banking companies which are placed in moratorium by the Reserve Bank of India under Section 45 of the Banking  Regulation Act, 1949, from the mandatory requirement of pre-merger approval under the Competition Act for a period of five years until 11 March 2025.

Review of CCI Orders by the appellate authority, National Company Law Appellate Tribunal


On 8 August 2018, the CCI approved the proposed acquisition of up to 77% of outstanding shares of Flipkart Private Limited (Flipkart) by Wal-Mart International Holdings, Inc (Walmart) as it did not find the transaction to cause AAEC in India. During the review period, the CCI received representations from several retailers and trade associations raising objections to the combination, including allegations of deep discounting, preferential treatment to select e-tailers resulting in the combination having a negative impact on small and medium enterprises. The CCI noted that the majority of the objections had no nexus with competition law and were beyond the CCI’s jurisdiction.

Against allegations of deep discounting and preferential treatment to select e-tailers, the CCI observed that the same did not result from the combination under review.

Aggrieved, the Confederation of All India Traders (CAIT), a trade association challenged the CCI order before National Company Law Appellate Tribunal (NCLAT). On 12 March 2020, the NCLAT upheld the CCI order and dismissed the appeal filed by CAIT. The NCLAT clarified that the CCI, while approving a combination, only has to investigate whether it will cause AAEC or not. The CCI is not required to launch an antitrust investigation at the prime facie stage itself in case the CCI believes that the combination will not cause AAEC.

Eli Lily/Novartis

In another case, the NCLAT provided clarification on the computation of assets and turnover for combinations involving acquisition of a business division. In 2016, the CCI imposed a penalty of INR10 million (USD 130,857) on Eli Lily as it failed to notify the acquisition of the business division of Novartis India Limited (NIL), namely, the animal health business in India (NAH India) to the CCI. The CCI noted that Eli Lily had incorrectly determined that its combination benefited from the then applicable de-minimis/target exemption since it had failed to consider the entire turnover and asset value of NIL (including its non-animal/human health business).

Aggrieved, Eli Lily challenged the CCI order before the NCLAT. Eli Lilly contended that the CCI erroneously applied thresholds of the de minimis/target exemption to the incorporated entity (NIL) and not NAH India. The Competition Act applies the test of threshold to the “person” or “enterprise” being acquired, and expressly defines “enterprise” broadly to include both incorporated and non-incorporated businesses.

On 12 March 2020, the NCLAT set aside the CCI order. The NCLAT took into consideration the subsequent de-minimis/target exemption notifications and the press release issued by the Central Government which clarified its intent to extend the exemption to the business being acquired and not merely to incorporated entities. Given that the CCI failed to consider the asset value and the turnover of NAH India, which did not exceed the de-minimis/target exemption thresholds; there was no requirement of notifying the combination to the CCI.

Developments Relating to Merger Remedies

The Indian merger control regime has seen a noticeable shift in the nature of the CCI’s review of combinations. In the initial days, the CCI’s review and modifications dealt with benign changes to the transaction structure, such as duration of non-compete obligation. After a couple of years, the CCI’s approach to address AAEC concerns resulted in ordering several divestitures. Though, in the recent past the CCI appears to be adopting a mature, balanced approach that demonstrates restraint, but still ensures that the competition dynamics in the markets are not adversely affected.

To date, the CCI has imposed modifications in 36 notified transactions (including modifications to non-compete obligations), out of which five combinations were approved in the past year). The industry seems to have adopted the option to offer voluntary modifications (which was introduced in 2018) as is evident by the combinations discussed below.

Reliance Industries/DEN Networks and Hathway Cable

On 21 January 2019, the CCI conditionally approved the acquisition of 65.96% of equity share capital of DEN Networks Limited (Den) and 51.34% of equity share capital of Hathway Cable & Datacom Limited (Hathway) by entities belonging to the Reliance Industries Limited Group (Reliance). Den and Hathway are two of the largest multi-system operators in India. Reliance is, amongst other things, engaged in the wholesale supply of television channels to distribution companies, retail supply of Audio Video (AV) content, and provision of Wireless Broadband Internet Services (BIS).

Based on the overlapping business activities of the parties, the CCI carried out the competition assessment in three segments namely, (i) broadcasting and distribution of TV channels and AV content; (ii) provision of TV Wired BIS; and (iii) advertising airtime on TV channels. In each of these segments, the CCI noted that owing to the regulatory landscape, low market shares of the parties and presence of multiple players, the combination will not cause any AAEC.

The CCI, however, expressed concerns regarding the cost that could be incurred by the customer for technical realignment of its home premised equipment. In order to address these concerns, Reliance offered voluntary modifications, which included an undertaking that (i) there will not be any technical re-alignment of equipment of existing subscribers of Den and Hathway; (ii) in the event of technical re-alignment, the costs will be borne by Reliance; and (iii) customers will be free to choose between broadband, cable TV and telephone and customise their bundle of services. The CCI while accepting the commitments directed Reliance to submit a compliance report to the CCI for the foregoing on an annual basis for five years.

TRIL Urban Transport, Valkyrie Investment and Solis Capital (Singapore)/GMR Airports

On 1 October 2019, the CCI conditionally approved the proposed acquisition of up to 55.2% of the equity share capital of GMR Airports Limited (GAL) by a consortium of investors, namely, TRIL Urban Transport Private Limited (Tata Group), Valkyrie Investment Pte Limited and Solis Capital (Singapore) Pte. Limited (collectively as the "Acquirers").

Tata Group, among other businesses, has majority stake in two airlines, namely, AirAsia India, and Vistara Airlines. GMR group, through its subsidiaries, operates and manages the Delhi and Hyderabad airports.

The CCI noted that, post the combination, the Tata Group (though GAL, AirAsia India and Vistara Airlines) will have a presence in both the upstream (namely, the market for provision of access to airport facilities/premises at each of the target airport) and downstream markets (namely, the market for provision of air transport activities and other specific services at each of the target airports) which may lead to conflict of interest and an incentive to foreclose other downstream players, namely, the competing airlines, among other service providers.

In order to alleviate the CCI’s concerns, the Acquirers offered voluntary modifications, which included refraining from (i) appointing a director/key managerial person in the company’s operating airport in India (GAL’s subsidiary companies managing the airports); (ii) appointing a director on the board of GAL, who is a director in any entity that operates a scheduled airline in or outside India; and (iii) exercising voting rights in matters of slot allocation and from directly/indirectly disclosing any commercially sensitive information pertaining to slot allocation to the nominee director appointed on behalf of the Tata Group. The Acquirers also undertook to submit a compliance report to the CCI for the foregoing.

Kia Motors Corporation and Hyundai Motors Company/ANI Technologies and Ola Electric Mobility

On 30 October 2019, the CCI conditionally approved the minority acquisition of fully and compulsorily convertible cumulative preference shares of ANI Technologies and Ola Electric Mobility Private Limited (collectively as "Ola") by Hyundai Motor Company (Hyundai) and Kia Motor Corporation (Kia).

Hyundai and Kia are a part of the Hyundai Motor Group, inter alia, engaged in the business of manufacturing and distribution of automobiles in India. Ola is a ride-sharing company that integrates city transportation for customers and driver-partners onto an online platform ensuring convenient, transparent and quick service fulfilment.

The CCI noted that as a result of this strategic collaboration, Ola could exclusively procure Hyundai and Kia cars for leasing them to its drivers, which would cause AAEC. In order to alleviate these concerns, Hyundai and Kia offered voluntary modifications, which included (i) the strategic collaboration to be on a non-exclusive basis; and (ii) Ola’s algorithm for the marketplace would not give preference or discriminate against any driver solely based on the brand of the car. Hyundai and Kia also undertook to submit an affidavit from Ola to the CCI for the foregoing.

Thus, it appears that while historically the CCI favoured structural remedies to address the AAEC concerns, it is increasingly deploying behavioural remedies. Giving the parties the option to propose modifications voluntarily has resulted not only in shorter approval timelines but also more business-friendly modifications. Thus, the less intrusive approach to addressing AAEC concerns demonstrates that the CCI is attuned to ensuring that the business viability of the notifying parties is not adversely affected by the modification process.

Developments relating to Gun-jumping

The Indian merger control regime is mandatory and suspensory in nature. Thus, if any party consummates a notifiable transaction, in full or in part, prior to the approval of the CCI, it would tantamount to "gun-jumping". The penalty may extend up to 1% of the total turnover or the assets, whichever is higher, of the combination. To date, the CCI has found gun jumping violations in 39 out of 740 combinations; out of which only one combination was penalised in the previous year.

On 21 November 2019, the CCI imposed a penalty of INR 50 lacs (USD 65,515) on Canada Pension Plan Investment Board (CPPIB) for failing to notify and disclose an inter-connected transaction to the CCI.

CPPIB had filed a merger notification and sought the CCI’s approval for its acquisition of 16.33% of the equity share capital of ReNew Power Limited (ReNew) (Primary Transaction). The CCI approved the Primary Transaction on 9 January 2018, which was closed by the parties on 23 March 2018.

Subsequently, on 15 January 2018, ReNew acquired Ostro Energy Private Limited (Ostro Transaction), which was supported by the Primary Transaction. The Ostro Transaction was closed on 28 March 2018. As such, neither the details of the Ostro Transaction were disclosed in the merger notification filed in relation to the Primary Transaction, nor was it notified to the CCI. The CCI came to know of the Ostro Transaction by way of press releases issued by ReNew and CPPIB on 2 April 2018 and 3 April 2018, respectively.

Based on the review of internal e-mail correspondence and documents considered by CPPIB’s board, the CCI observed that the Ostro Transaction was inter-connected with the Primary Transaction as, (i) ReNew approached CPPIB for funding of the Ostro Transaction; (ii) CPPIB sought due diligence reports for the Ostro Transaction; (iii) the Primary Transaction was undertaken by CPPIB only as a means to finance the Ostro Transaction; (iv) both CPPIB and ReNew issued press releases stating that the Primary Transaction was undertaken to support the Ostro Transaction; and (v) ReNew was in late stage discussions to acquire Ostro Energy at the time of the Primary Transaction. Thus, CPPIB should have disclosed it in the merger notification filed for the Primary Transaction.       

Notable Combinations Reviewed by the CCI

Apart from the above combinations, in the automobile sector, the CCI approved the (i) formation of a joint venture between Mahindra & Mahindra and Ford Motor Company, which saw Ford India transfer its operations to the said joint venture; and (ii) the acquisition of a minority cross-shareholding between Toyota Motor Corporation and Suzuki Motor Corporation to enable joint development of new technology.

In the pharmaceutical sector, the CCI approved the formation of a joint venture between GlaxoSmithKline Plc. (GSK) and Pfizer Inc for the consolidation of certain consumer healthcare products.

In the digital sector, the CCI approved the acquisition of (i) Aditya Birla Retail by Samara Capital and Amazon; (ii) minority stake in Limited (Billdesk) by Visa; (iii) minority stake in Quess Corp Limited by Amazon; and (iv) outstanding voting securities of MakeMyTrip by International.

Insolvency Cases

Since the introduction of the time-bound insolvency resolution process under the IBC in 2016, a number of merger notifications have been filed with the CCI in relation to the acquisition of companies undergoing insolvency. Given the criticality of adherence to strict timelines under the IBC, the CCI has swiftly reviewed and approved several insolvency cases, despite few being long-form notifications. The CCI has so far reviewed about 18 combinations under the IBC, including nine since January 2019 such as NBCC/Jaypee Infratech, Carval Funds/Uttam Galva Metallics, UV Asset Reconstruction/Aircel and JSW Steel Coated/Asian Colour Coated Ispat.

Proposals in Pipeline

Introduction of Competition Amendment Bill

On 20 February 2020, the MCA introduced the draft Competition (Amendment) Bill, 2020 (Bill), which sought to clarify certain provisions, increase transparency and improve the overall efficiency of the competition law regime in India. The Bill was issued pursuant to the recommendations of the Competition Law Review Committee (CLRC), which was set up by the MCA in October 2018 to review and recommend amendments to the Competition Act in line with international best practices and the changing economic reality.

The Bill proposes notable amendments for the regulation of combinations, which can broadly be categorised into the following.

New criteria to trigger merger filing

The Bill proposes to empower the Central Government (in consultation with the CCI) to prescribe any new criteria (such as deal value or size of transaction) to trigger mandatory notification to the CCI. The rationale being to capture transactions in the digital markets within the scope of the CCI’s review, which currently escape scrutiny due to low asset value/turnover.

Codification of GCR

With a view to bring the Competition Act in line with the August Amendments and codify the provision for GCR, the Bill proposes to empower the Central Government (in consultation with the CCI) to specify a deemed approval process for transactions which are not otherwise exempt from notification to the CCI, in public interest. Such transactions can be notified to the CCI in a separate prescribed form.

Wider definition of "control"

The Bill proposes to codify the CCI’s decisional practice by expanding the scope of control to include the ability to exercise "material influence" in any manner whatsoever over the management or strategic commercial decisions by one or more enterprise/group over another.

Waiver of standstill obligation in certain cases

Given that the Indian merger control regime is suspensory in nature, there are standstill obligations imposed on the parties to a combination under which they are not permitted to consummate any part of a transaction prior to the CCI’s approval. However, in order to reduce the regulatory burden on listed companies and account for special characteristics of combinations involving implementation of an open offer and acquisition of convertible shares/securities on a stock exchange, the Bill proposes a dilution of the standstill obligation in such cases on the fulfilment of prescribed criteria.

Timelines for review of combinations reduced

With a view to provide faster approvals, the Bill proposes to reduce the  statutory timeline for (i) the CCI to form its prima facie view on a merger notification from 30 working days to 20 calendar days; and (ii) deemed approval of a combination notified to the CCI from 210 calendar days to 150 calendar days (extendable by an additional 30 calendar days in certain events).

Proposal to exempt stock exchange share acquisitions and public bids from standstill obligations

In December 2019, the CCI sought public comments on the proposed amendments to the Combination Regulations in relation to exempting public bids and stock-exchange share acquisitions from the  standstill obligation, provided (i) the acquirer gives notice to the CCI without any delay; and (ii) the acquirer does not exercise its rights (attached to the shares) and/or influence the target enterprise in any manner. This would allow potential acquirers of shares in listed companies to purchase such shares without incurring gun-jumping risks.


2020 is expected to be a crucial year for Indian competition law, in terms of the progress of the Bill through the legislature, and into law. The developments in the Indian merger control regime demonstrate that the CCI is willing to tailor its analysis of complex transactions to the facts and needs of each case, rejecting a "one size fits all’" approach. The introduction of several key changes to the merger control regime appear to be in line with the government’s stated policy of increasing the ease of doing business in India and providing faster approval. The CCI continues to take steps towards aligning its practices with the jurisprudence of mature jurisdictions. Although the Indian merger control regime is relatively new, the CCI’s evolution over the past year is encouraging and attuned to the evolving needs of doing business in India.

J Sagar Associates

B-303, 3rd Floor Ansal Plaza
Hudco Place
August Kranti Marg
New Delhi 110049

+91 11 4311 0600

+91 11 4311 0617
Author Business Card

Trends and Development


J Sagar Associates is a leading full-service national law firm with over 300 professionals operating out of eight offices, in Ahmedabad, Bengaluru, Chennai, Gujarat International Finance Tec-City (GIFT), Gurugram, Hyderabad, Mumbai and New Delhi. The JSA competition team comprises ten lawyers, including two partners, and offices in New Delhi and Mumbai. The team advises on all aspects of the Indian competition regime, including multinational merger approvals, cartels (including leniency), abuse of dominance, compliance and other areas of antitrust litigation. The team’s expertise spans a wide variety of sectors. Recently, JSA secured the Competition Commission for India’s approval for the formation of a joint venture between Ford Motor Company and Mahindra & Mahindra Limited and sale of the automotive business of Ford India Private Limited to the said joint venture.

Compare law and practice by selecting locations and topic(s)


Select Topic(s)

loading ...

Please select at least one chapter and one topic to use the compare functionality.