MCA to Exempt Select M&A Deals from Filing Combination Notices

The Ministry of Corporate Affairs (MCA) has proposed to exempt certain mergers and acquisitions from the requirement of giving notice to the Competition Commission of India (CCI) for entering into combinations.

This proposal forms part of the draft CCI (Exempted Combination) Rules, 2024. The Schedule to these rules presents the scenarios where though the acquisition, merger or amalgamation specified constitutes a combination as per the thresholds prescribed under Section 5 of the Competition Act, 2002, they would be exempt from having to comply with Sub-sections (2), (2A), and (4) of Section 6 of the said Act.

Accordingly, if the assets or shares of an enterprise are acquired in the ordinary course of business, compliance with said provisions would not be necessary. Further, a merger or amalgamation of enterprises within the same group would also be eligible for the exemption subject to the condition that such a transaction does not result in a change in control.

Currently, the 2011 Combination Regulations clarify that the categories of combinations listed under Schedule I are ordinarily not likely to cause an appreciable adverse effect on competition in the country and hence, notice under Section 6(2) need not normally be filed. However, it is stated that the same does not amount to absolute exemption and the transactions need to be assessed on a case-to-case basis.[1]

The Ministry has also put forward the proposed de-minimis thresholds, and the criteria for green channel, vide the draft CCI (De-Minimis) Rules, 2024, and the draft CCI (Green Channel) Rules, 2024. Public comments on the draft rules have been sought by April 10, 2024.



Date: March 19, 2024