CCI Sets New Standards in M&A Regulations

January 4, 2025

The Competition Commission of India (CCI) has made strides in regulatory efficiency, particularly in the realm of mergers and acquisitions (M&A). The Annual Report for FY 2023-24 revealed that the average clearance time for mergers is now just 16 days. This marks a notable improvement from previous years and reflects CCI’s dedication to maintaining a competitive market while ensuring fair practices.

Green Channel Scheme Overview

The Green Channel Scheme, introduced in August 2019, has revolutionised the M&A landscape. This scheme allows automatic approvals for combinations that do not present horizontal, vertical, or complementary overlaps. Since its launch, 100 combination notices have been filed under this scheme. Despite a slight decrease in usage from 27% in FY 2021-22 to 22% in FY 2023-24, it remains a preferred option for businesses seeking quick clearance.

Pre-Filing Consultations

CCI offers pre-filing consultations to assist businesses prior to formal merger filings. This voluntary service enables parties to engage informally with CCI, allowing them to clarify filing forms, documentation requirements, and initial competition concerns. Although non-binding, these consultations improve transparency, reduce filing errors, and expedite the review process, thereby facilitating smoother regulatory compliance.

The Competition Amendment Act 2023

The Competition Amendment Act 2023 introduced a new deal value threshold for notifying mergers and acquisitions. This amendment aims to capture high-value transactions, particularly in digital and new-age markets. CCI’s processes remain stringent yet efficient, ensuring thorough scrutiny of combinations that may adversely affect competition. Proposed modifications help mitigate potential competition concerns.

Impact on Inorganic Growth Strategies

The CCI’s rapid review processes have boosted inorganic growth strategies across various sectors. The reduced timelines, alongside the Green Channel initiative, have alleviated regulatory uncertainty, empowering businesses to pursue deals more efficiently. Analysts credit the growing confidence in CCI’s mechanisms to its transparent processes and robust competition analysis.

The Green Channel Scheme was launched in August 2019.
CCI’s average merger clearance time is now 16 days.
The deal value threshold aims to regulate high-value digital transactions.
Pre-filing consultations are a non-binding but helpful resource.
Usage of the Green Channel decreased from 27% to 22% in FY 2023-24.

Challenges Ahead for CCI

Despite the successes, the CCI faces challenges due to the increasing complexity of M&A filings, especially in digital markets. The upcoming implementation of the deal value threshold is expected to refine CCI’s regulatory approach. The Commission remains committed to ensuring efficiency and fairness, positioning itself as important player in India’s economic growth narrative. Its focus on encouraging competition and modernising regulatory frameworks is essential for businesses aiming to expand through mergers and acquisitions.

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