In a significant move aimed towards ease of doing business in India, the Ministry of Corporate Affairs has issued two notifications on March 7, 2024 by way of which it has increased: (i) the jurisdictional thresholds under the Competition Act, 2002 (“Act”) (which determine the notifiability of a transaction to the Competition Commission of India (“CCI”)), and (ii) the target exemption thresholds (an exemption applicable to notifiable transactions) with effect from 8 March 2024.
Threshold for determination of a ‘combination’ under Section 5 of the Act:
An acquisition of one or more enterprises, or a merger or amalgamation of enterprises, where the parties to such transaction exceed any of the asset or turnover thresholds prescribed in Section 5 of the Act, whether as individuals or as a group, shall be a ‘combination ‘ for the purposes of the Act. Section 6 of the Act mandates that ‘combinations’ are required to be notified to the CCI prior to completion.
The revised thresholds are as follows:
Enterprise Level
- India – Assets of over INR 2,500 crores Or Turnover of over INR 7,500 crores
- Worldwide – Assets of over USD 1.25 billion, including at least INR 1,250 crores in India Or Turnover of over USD 3.75 billion, including at least INR 3,750 crores in India
Group Level
India – Assets of over INR 10,000 crores Or Turnover of over INR 30,000 crores
Worldwide – Assets of over USD 5 billion, including at least INR 1,250 crores in India Or Turnover of over USD 15 billion, including at least INR 3,750 crores in India
Threshold for target exemption to competition approval requirements
The revised target exemption thresholds are as follows:
- The value of assets being acquired, taken control of, merged or amalgamated is not more than INR 450 crore or the turnover of the target enterprise (i.e., the enterprise whose control, shares, voting rights or assets are being acquired) or the turnover attributable to the assets being acquired, taken control of, merged or amalgamated (as applicable) is not more than INR 1,250 crore.
- The above exemption is available for a period of two years, i.e., valid till 7 March, 2026.
