Thresholds for Combinations Regulation in India

Table: Thresholds for determining Combinations

Combination	India level combination		Global level combination (Indian as well as Overseas)
Parameters	Entity wise (acquiring + acquired)	Group level (Group + Acquired entity)	Entity wise (Acquiring + Acquired)	Group level (Group + Acquired entity)
Asset value	INR 15 billion Or 1500 crores	INR 60 billion  or 6000 crore	Global assets: USD 0.75 billion Including at least Indian assets: INR 7.5 billion or 750 crores	Global assets: USD 3 billion Including at least Indian assets: INR 7.5 billion or 750 crores
Turnover	INR 45 billion or 4500 crore	INR 180 billion or 18000 crore	Global turnover: USD 2.25 billion Including at least Indian turnover: INR 22.5 billion or 2250 crore	Global turnover: USD 9 billion Including at least Indian turnover: INR 22.5 billion or 2250 crore

Requirement of Notification & Schedule 1 (Combination Regulations) Exemptions.

De-minimis exemption

The Central Government has by a notification exempted the acquisition of small targets [with assets of less than INR 250 crore in India] or turnover of less than INR 750 crore in India from the provisions of section 5 of the Act and accordingly no filing needs to be made with the Commission for such acquisitions.[1]

Up to 25% exemption: An acquisition of shares or voting rights, referred to in Section 5, solely as an investment or in the ordinary course of business which neither result in total shares or voting rights held by the acquirer, directly or indirectly, to be twenty five per cent (25%) or more of the total shares or voting rights of the target (acquire) company;

Not leading to acquisition of control of the enterprise whose shares or voting rights are being acquired. 

Between 25% and 50% (creeping acquisition allowed) not resulting in gross acquisition of more than five per cent (5%) of the shares or voting rights of such enterprise in a financial year.(Schedule I, Entry 1A)

Acquirer already holding 50% or more shares or voting rights of the target: an acquisition of shares or voting rights, referred to in section 5, where the acquirer, prior to acquisition, has fifty percent (50%) or more shares or voting rights in the target enterprise, except in the cases where the transaction results in transfer from joint control to sole control. Schedule I, Entry 2

·         Acquisition of assets, where there is no change in control, and does not represent substantial business operations for a location, product or service, provided asset acquisition is: (Schedule I, Entry 3)

o   Not directly related to the business activity of acquirer (horizontally or vertically), or

o   Solely as an investment, or

o   In the ordinary course of business

·         Amended tender offer, where a notice has already been filed with Commission pre-amendment. (Schedule I, Entry 4)

·         An acquisition of stock –in-trade, raw materials, stores and spares, trade receivables and other similar current assets in the ordinary course of business. (Schedule I, Entry 5)

·         An acquisition of shares or voting rights pursuant to a bonus issue or stock splits or  consolidation of face value of shares or buy back of shares or subscription to rights issue of shares, not leading to acquisition of control. (Schedule I, Entry 6)

·         Acquisition by underwriters, or stock brokers on behalf of clients. (Schedule I, Entry 7)

·         Intra-group combinations – Intra-group transfers of control, shares, voting rights or assets would not be subject to Combination Regulations unless the acquired enterprise is jointly controlled by enterprises that are not part of the same group. (Schedule I, Entry 8)

·         A merger or amalgamation of two enterprises where one of the enterprises has more than fifty per cent (50%) shares or voting rights of the other enterprise, and/or merger or amalgamation of enterprises in which more than fifty per cent (50%) shares or voting rights in each of such enterprises are held by enterprise(s) within the same group; provided that the transaction does not result in transfer from joint control to sole control. (Schedule I, Entry 9)

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[1] (Notification dated 4^th March, 2011, available at http://www.cci.gov.in/images/media/notifications/SO479(E),480(E),481(E),482(E)240611.pdf, last visited 02^nd September, 2014.