The Competition Commission of India has just issued a merger control order with very significant ramifications.
In the case of an amalgamation of a group company into Tata Chemicals Limited ("TCL") the Commission has, while approving the amalgamation, held that the complete exclusion from filing available for intra-group acquisitions mentioned in the Schedule 1 to the Combination Regulations only relates to the acquisition of control or shares or voting rights or assets within the same group and is inapplicable to amalgamations.
As a result mergers and amalgamations, even though they may be within the same group, do not qualify for exclusion from filing.
Further, the de minimis exemption notification issued by the Government on March 4, 2011 also uses similar language as the exclusion mentioned in Schedule 1 to the Combination Regulations. It only exempts an acquisition of control or shares or voting rights or assets of a value lower than the de minimis values mentioned in the notification. Therefore, mergers and amalgamations would appear to also not be entitled to avail of the de minimis threshold exemptions in the notification.
As a result, all mergers and amalgamations, even within the same group, would required to be examined to ascertain whether they meet the general thresholds prescribed under the Competition Act which would trigger a filing requirement.
Originally published January 6, 2012.
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