Regulation of Combinations: formula sheet

Key formulas

Parties test (acquisition, clause a(i))

India: assets > ₹1,000 crore OR turnover > ₹3,000 crore. Worldwide: assets > US$500 million (at least ₹500 crore in India) OR turnover > US$1,500 million (at least ₹1,500 crore in India)

Applies to the acquirer and the target taken together. The same limits apply to clause (b)(i) and to the merged or new entity in clause (c)(i).

Group test (clause a(ii), b(ii), c(ii))

India: assets > ₹4,000 crore OR turnover > ₹12,000 crore. Worldwide: assets > US$2 billion (at least ₹500 crore in India) OR turnover > US$6 billion (at least ₹1,500 crore in India)

Applies to the group the target or merged entity would belong to after the deal.

Deal value threshold (clause d)

Value of transaction > ₹2,000 crore, and the target has substantial business operations in India as specified by regulations

Value includes direct, indirect and deferred consideration.

Small target exemption (clause e)

Not a combination if the target's Indian assets or turnover are not more than the prescribed value

It overrides clauses (a), (b) and (c). The Act leaves the figure to be prescribed, so do not quote a number from the Act.

Group

Two or more enterprises where one can exercise 26% or more voting rights, or appoint more than 50% of the board, or control management or affairs of the other

Per the Explanation. The percentage may be raised by prescription.

Control

Ability to exercise material influence, in any manner, over management, affairs or strategic commercial decisions

Material influence is a lower standard than majority control.

Prohibition rule

Combination + AAEC (caused or likely) in relevant market in India ⇒ void (s 6(1))

Applies to the effect on competition within India. Both actual and likely effect count.

Notice duty

Notice to CCI after board approval (merger/amalgamation) or after execution of agreement/other document (acquisition/control), but before consummation (s 6(2))

Notice is in the specified form with the fee. The 30-day deadline was removed by the 2023 amendment.

Standstill period

No effect until 150 days from notice OR CCI order under s 31, whichever is earlier (s 6(2A))

Earlier it was 210 days. Use 150 days.

Deemed approval

No order within 150 days of notice under s 6(2) ⇒ combination deemed approved (s 31(6))

Also, if CCI forms no prima facie opinion under s 29(1B), the combination is deemed approved (proviso to s 31(1)).

Green channel route

Notice under s 6(4) acknowledged ⇒ deemed approved under s 31(1); no notice under s 6(2) or approval under s 6(2A) needed (s 6(5))

Only for combinations meeting the prescribed criteria and not otherwise exempt. Approval is void ab initio if the filing is incorrect or the criteria are not met (s 6(6)), after a hearing.

Suo motu inquiry limit

No inquiry under s 20(1) after one year from the date the combination took effect

Applies to inquiries on the Commission's own knowledge or information.

Exclusion

s 6 does not apply to share subscription, financing facility or acquisition by a public financial institution, FPI, bank or Category I AIF, pursuant to a covenant of a loan or investment agreement (s 6(9))

The acquisition must be under a covenant of the loan or investment agreement.

Duty to notify

Section 6(2): proposing person or enterprise shall give notice to CCI, in specified form with fee, disclosing details of the proposed combination

Mandatory since 1 June 2011. Applies to combinations that are notifiable, i.e. not exempt.

Timing window

File AFTER (board approval of merger/amalgamation OR execution of agreement/other document) but BEFORE consummation

The former 30-day deadline from the trigger was replaced by this window from 10 September 2024.

Standstill

Section 6(2A): no effect until earlier of (150 days from notice) or (CCI order under section 31)

Earlier text said 210 days. Use 150 days.

Prima facie opinion

Section 29(1B): CCI forms prima facie opinion within 30 days of receiving notice under section 6(2)

If prima facie adverse effect is seen, a show-cause notice under section 29(1) follows. The parties respond within 15 days.

Green channel (deemed approval)

Section 6(4) to (6): notice in specified form and fee; on acknowledgement, deemed approved under section 31(1)

Void ab initio if criteria not met or information materially incorrect or incomplete, after a hearing.

Void combination

Section 6(1): combination causing or likely to cause appreciable adverse effect on competition within relevant market in India is void

This is the substantive test behind the filing duty.

Carve-out for investors

Section 6(9): section 6 does not apply to share subscription or financing facility or acquisition by a public financial institution, foreign portfolio investor, bank or Category I AIF, pursuant to a covenant of a loan or investment agreement

Applies only to acquisitions made under such a covenant.

Look-back inquiry

Section 20(1): CCI may inquire on its own into a combination, but not after one year from the date it took effect

Applies even where no notice was filed.

Test for inquiry

Inquiry question = has caused or is likely to cause an appreciable adverse effect on competition in India

Section 20(1) and 20(2). Suo motu inquiry cannot start after one year from the date the combination took effect.

Prima facie opinion

Within 30 days of receipt of Section 6(2) notice

Section 29(1B). If no prima facie opinion is formed, the combination is deemed approved (Section 31(1) proviso).

Show cause response

Parties respond within 15 days of the notice

Section 29(1). The CCI may then call for a Director General report (Section 29(1A)).

Publication and objections

Direction within 7 days; publication within 7 days of direction; objections within 10 days of publication

Section 29(2) and (3). Section 29(4): the CCI may call for more information within 7 days of the objection period; parties furnish it within 10 days (Section 29(5)).

Statement of objections

Parties explain within 25 days of receipt

Section 29A(1). Parties may offer modifications along with their explanation (Section 29A(2)).

Modification rounds

CCI communicates rejection within 7 days; parties revise within 12 days; CCI evaluates within 12 days of receipt

Section 29A(3) and its first proviso. The CCI may also propose modifications suo motu (second proviso).

Outer time limit

No order within 150 days of Section 6(2) notice = deemed approval

Section 31(6).

Section 31 powers

Approve | approve with modifications | direct not to take effect | order not given effect to, declare void, or frame a scheme

Section 31(1), (2), (3) and (5). A void combination is dealt with under other laws as if it never took place (Section 31(13)).

Exemption from notice

Section 6(7): combinations meeting prescribed criteria and falling in the notified categories are exempt from section 6(2) notice and the section 6(2A) wait

The categories sit in the rules and regulations (Schedule I of the Combination Regulations). Name the category and check its conditions against the facts.

De minimis (small target) test

Exempt if target's assets in India ≤ notified asset limit OR target's turnover in India ≤ notified turnover limit

Notified by the Central Government under section 54. The limits are revised periodically, so use the figures in the question. Only the target is tested, not the acquirer.

De minimis does not cover large-value deals

If the deal value threshold in section 5(d) is met, the de minimis exemption is not available

Check deal value and the target's substantial business operations in India before relying on de minimis.

Lender and investor carve-out

Section 6(9): section 6 does not apply to share subscription, financing facility or acquisition by a public financial institution, foreign portfolio investor, bank or Category I AIF under a covenant of a loan or investment agreement

The acquisition must flow from a covenant in the loan or investment agreement.

Green channel (not an exemption)

Section 6(4) to 6(6): notice on prescribed criteria, deemed approved on acknowledgement, void ab initio if incorrect or incomplete

If void, the parties may file a regular notice within thirty days of the CCI order, and no section 43A action is taken in that period.

Penalty for failing to notify

Up to 1% of the higher of total turnover, assets or deal value of the combination (section 43A)

Applies when notice under section 6(2) or 6(4) is not given or section 6(2A) is breached.

Penalty for non-notification or breach of standstill (section 43A)

Maximum penalty = 1% × higher of (total turnover, assets, or deal value under section 5(d)) of the combination

It is a ceiling: the penalty may extend to this amount. The CCI decides the actual figure. It applies to failure to give notice under section 6(2) or 6(4), contravention of section 6(2A), or failure to submit information in an inquiry under section 20(1).

Standstill period (section 6(2A))

No effect until the earlier of 150 days from notice or CCI orders under section 31

The period was earlier 210 days. It was cut to 150 days from 10 September 2024.

Deal value threshold

Section 5(d): combination also covered by the value of the transaction

It brings in deals with a high transaction value even where asset or turnover limits are not met. Quote the prescribed value only if the question supplies it.

Deemed approval (section 31(6))

No order within 150 days of notice under section 6(2) → combination deemed approved

Deemed approval also arises under the proviso to section 31(1) if no prima facie opinion is formed under section 29(1B).

Green channel (section 6(4) and 6(5))

Notice under 6(4) and CCI acknowledgement → deemed approved

If the CCI finds the criteria unmet or the information materially incorrect or incomplete, approval is void ab initio under section 6(6) after a hearing. A notice under section 6(2) may then be filed within 30 days of the order, and no section 43A action is taken till that period ends.

Penalty for non-compliance with directions (section 43)

Fine up to ₹1,00,000 per day of failure, subject to a maximum of ₹1,00,00,000

It applies where a person fails without reasonable cause to comply with directions of the CCI under section 36(2) and (4) or of the Director General under section 41(2).

Quick revision

• Section 6(1): a combination causing or likely to cause appreciable adverse effect on competition within the relevant market in India is void.
• Section 6(2): notice to the CCI, in the specified form and with fee, before consummation.
• Notice follows board approval of a merger or amalgamation, or execution of an agreement or other document for acquisition or acquiring control.
• Section 6(2A): no combination takes effect until 150 days from notice, or earlier if the CCI passes orders under section 31.
• Other document includes a document conveying an agreement or decision to acquire, a document executed by the acquirer where the acquisition is without the target's consent, and a public announcement under the SEBI Takeover Regulations, 2011 for acquisition of shares, voting rights or control.
• Section 6(4) and (5): on filing and acknowledgement under the prescribed criteria, the combination is deemed approved under section 31(1).
• Section 6(6): if the information is materially incorrect or incomplete, the deemed approval is void ab initio, after a hearing.
• Section 6(9): the section does not apply to specified acquisitions by a public financial institution, FPI, bank or Category I AIF under a covenant of a loan or investment agreement.
• Section 20(1): the CCI can inquire on its own, but not after one year from the date the combination took effect.
• Section 20(4) lists fourteen factors, including barriers to entry, market share, failing business, innovation and whether benefits outweigh adverse impact.
• Section 43A: penalty up to 1% of total turnover, assets or value of transaction, whichever is higher.
• Under the proviso to section 43A, after a section 6(6) voiding, a fresh notice can be given within thirty days and no action is taken until then.

Common mistakes

• Requiring both assets and turnover to cross the limit. Fix: The Act says assets OR turnover. One is enough within each test.
• Using worldwide figures for the India limit. Fix: Use India figures for the India limit. Worldwide figures need the minimum India component (₹500 crore assets or ₹1,500 crore turnover).
• Saying every combination is void. Fix: Only a combination that causes or is likely to cause AAEC in the relevant market in India is void. Others can be approved.
• Quoting 210 days and a 30-day filing limit. Fix: Use the current text: 150 days under section 6(2A), and notice after the trigger event but before consummation.
• Writing that notice must be filed within 30 days of the trigger event. Fix: Say the 30-day limit was replaced. Notice is now given after the trigger event but before consummation.
• Stating the standstill as 210 days. Fix: Use 150 days from the day notice is given, or an order under section 31, whichever is earlier.
• Treating the 150 days as the time for the prima facie opinion. Fix: Prima facie opinion is within 30 days of the notice. 150 days is the outer limit for the final order, after which the combination is deemed approved.
• Saying the CCI can start a suo motu inquiry at any time. Fix: State that no inquiry can begin after one year from the date the combination took effect.
• Testing the acquirer or the combined entity under the de minimis exemption. Fix: The de minimis test looks only at the target's assets in India or turnover in India.
• Requiring both the asset limit and the turnover limit to be met. Fix: The test is either/or. Meeting one limit is enough.

Exam tips

• Write the section and clause with each limit, for example Section 5(c)(i)(A). It shows exactness.
• Show a small comparison for each test: figure, limit, result. Examiners give marks for the method.
• Mention the deal value threshold and the clause (e) exemption even in theory questions on the meaning of combination.
• Quote the Explanation definitions of control, group and turnover when the facts hinge on them.
• End with the legal consequence: a combination is assessed by the CCI under Section 20 for appreciable adverse effect on competition in India.
• Quote section 6(1) word for word in the first line: "causes or is likely to cause an appreciable adverse effect on competition within the relevant market in India", and add "void".
• Always use 150 days and the current notice trigger. Mention the old 210 days and 30 days only as a one-line contrast.
• In case questions, list three or four section 20(4) factors that match the facts. Do not recite all fourteen.