The document outlines a presentation by Kalpeshkumar L. Gupta on regulation of combinations under the Competition Act 2002 in India. The presentation covers an introduction to the Competition Commission of India (CCI), regulations around combinations, recent CCI orders on combinations, and concludes with noting the smooth approval procedure of CCI in its first year of regulating combinations. It also includes two examples of CCI approving major acquisitions by Aditya Birla Group and News Corporation.

1. KALPESHKUMAR L. GUPTA
LL.M., MBL (NLSIU), M.Phil. (Law)
Academic Associate – IIM Ahmedabad
GICTL – 2012, GNLU - March 2-3, 2013

2. Outline of the presentation :-
1. Introduction
2. An Overview of CCI
3. Regulation on Combination
4. Latest Orders of CCI on
Combination
5. Conclusion
6. Video on CCI ON M&A
Regulation
7. Q & A
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6. MRTP ACT, 1969
For Prohibition of
Monopolistic,
Unfair &
Restrictive Trade
Practice
Liberalization – 1991
After this – difficulty arose to
administer present market
Competition Act, 2002 to meet the
requirement of the highly competitive market
1. Anti-Competitive Agreements
2. Abuse of Dominance
3. Combinations
4. Competition Advocacy
(C) K L GUPTA

7. An Act to provide, keeping in view of
the economic development of the
country for the establishment of a
Commission to
-prevent practices having adverse
effect on competition,
-to promote and sustain competition in
markets,
-to protect interest of the consumer
and
-to ensure freedom of trade carried on
by other participants in markets
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10. Regulation on Combinations (Section 64) :-
The CCI (Procedure in regard to the transaction of
business relating to combinations) Regulations,
2011 (Notified on May 11, 2011)
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11. Combination (Section 5) :-
The acquisition of one or more enterprises by one
or more persons or merger or amalgamation of
enterprises shall be a combination of such
enterprises and persons or enterprises, if—
Acquirer or Acquiree or Jointly have
either in India assets of >1000 Crore or
turn over >3000 Crore or
in India or Outside India, in aggregate, the
assets of >$500 Million, including at least
Rs. 500 crore in India or turn over >$1500
Million including at least Rs. 1500 Crore in
India or
Cont..
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12. Cont..
Combination (Section 5) :-
After acquisition, jointly have
either in India assets >4000 crore or turn
over >Rs. 12000 Crores or
In India or outside India, in aggregate the
assets >$2 Billion including at least Rs. 500
Crores in India or turnover >$6 Billion
including at least Rs. 1500 Crores in India
or
Cont..
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13. Combination (Section 5) :-
Any merger or amalgamation in which-
the enterprise remaining after merger or
the enterprise created as a result of the
amalgamation have
either in India, the assets of the value of
>Rs. 1000 Crores or turn over >3000 Crores or
in India or outside, In aggregate, the assets
of the value of >>$500 Million including at least
Rs. 500 Crores in India or turnover >$1500
including at least Rs. 1500 Crores in India
Cont..
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14. Combination (Section 5) :-
The value of assets shall be determined by taking
the book value of the assets as shown, in the
audited books of account of the enterprise, in the
financial year immediately preceding the financial
year in which the date of proposed merger falls…..
………as reduced by any depreciation, and the
value of assets shall include the brand value,
value of goodwill, or value of copyright, patent,
permitted use, registered trade mark, registered
user, geographical indication, design or layout,
etc.
(C) K L GUPTA

15. Regulation of Combinations (Section 6) :-
-No Person or enterprise shall enter into a
combination which causes or is likely to cause an
appreciable adverse effect on competition and
such a combination shall be void.
-Notice to the Commission within 30 days from
execution of agreement / approval of the proposal
relating to mergers or amalgamation by the Board
of Directors of the Co. concerned.
-No Combination shall come into effect until 210
days have passed from day on which notice has
been given to Commission.
Cont..
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16. Regulation of Combinations (Section 6) :-
-The provisions of this section shall not apply to
share subscription or financing facility or any
acquisition, by a public financial institution,
foreign institutional investor, bank or venture
capital fund, pursuant to any covenant of a loan
agreement or investment agreement.
-Above financial organizations shall within 7 days
from the days of the acquisition file in Form III
with the Commission the details of acquisition.
(C) K L GUPTA

17. Notice for the proposed combination :-
-Form I with Fees of Rs. 10 lakhs (Schedule II)
-Where parties are engaged in production,
supply, distribution sale etc. of similar or
identical product with specified share market
then Form II with Fees of Rs. 40 lakhs
(Schedule II)
-In case of public financial institutions, FIIs,
bank or venture loan or any investment
agreement without fees in Form III
(C) K L GUPTA

18. Failure to file notice (Regulation 8):-
Where the parties to a combination fail to file
notice, then Commission upon its own knowledge
or information relating to such combination,
inquire into whether such a combination has
caused or is likely to cause an appreciable adverse
effect on competition within India and direct the
parties to the combination to file notice in Form II
within 30 days of the receipt of the notice.
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19. Obligation to file notice (Regulation 9):-
-In case of Acquisition, the Acquirer shall file the
notice.
-In case of merger parties to the combination
shall jointly file notice.
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20. Procedure for investigation of combinations
(Section 29) :-
-Commission is of the prima facie opinion that a
combinations is likely to cause or has causes an
appreciable adverse effect on competition, it will issue
notice to the parties to combination calling upon them
to respond within 30 days of the receipt of the notice
as why investigation in respect of such combination
should not be conducted.
-After receiving reply Commission may call for report
from DG.
-Commission will ask for publication of agreement if
there is prima facie case of appreciable adverse effect
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21. Orders of Commission on certain combinations
(Section 31) :-
-Where Commission is of the opinion that any
combination does not or is not likely to have an
appreciable adverse effect on competition it shall by
order approve the combination.
-If yes then it shall direct that combination shall not
take effect.
-Commission may propose to modify combination
make it lawful.
-If parties accept modification then it will be
approved.
-If parties do not accept modification, such
combination shall be deemed to have an appreciable
adverse effect on competition.
(C) K L GUPTA
Cont.

22. Cont.
Orders of Commission on certain
combinations (Section 31) :-
If the Commission does not on the expiry of a
period of 210 days from the date of notice given
to the Commission under sub-section (2) of
section 6, pass an order or issue direction in
accordance with the provisions of sub-section (1)
or sub-section (7), the combination shall be
deemed to have been approved by the
Commission.
(C) K L GUPTA

23. Acts taking place outside India but having an
effect on competition in India (Section 32) :-
The Commission shall, notwithstanding that, an
agreement referred to in Section 3 has been entered
into outside India;
a.Any party to such agreement is outside India; or
b.Any enterprise abusing the dominant position is
outside India or
c.A combination has taken place outside India or
d.Any other mater matter or practice or action arising
out of such agreement or dominant position or
combination is outside India,
Have power to inquire into such agreement or abuse of
dominant position or combination if such agreement or
dominant position or combination has or is likely to
have an appreciable adverse effect on competition,
pass such orders as it may deem fit.
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25. CCI Approved Acquisition of the Pantaloons
Format Business by Aditya Birla Group
Aditya Birla Nuvo Ltd. (ABNL), Peter England Fashions
Ltd (PEFRL), Indigold Trade & Service Ltd. (ITSL) and
Pantaloon Retail (I) Ltd. (PRIL) filed a notice under
Section 6(2) of the Competition Act, 2002 regarding the
proposed acquisition of the Pantaloons Format Business
(PFB) of PRIL.
The Commission concluded that the proposed acquisition
of PFB by ABG would not give rise to appreciable adverse
effect on competition in India and approved it under
Section 31(1) of the Act

26. Competition panel clears News Corp
acquisition of Star Sports
Star India’s parent firm News Corporation’s
proposal to acquire ESPN Star Sports has got a
green signal from the Competition Commission of
India (CCI).
Considering the presence of other sports channels
in India, such as DD Sports, TEN Action Plus, Ten
Sports, Ten Cricket, Ten Golf, Sony Six, Neo Sports
Plus, Neo Prime etc, the proposed combination is
not likely to give rise to any adverse competition
concern in India,” the CCI said.

27. (C) K L GUPTA

28. Smooth Approval Procedure :-
-CCI can curb the malpractice of Combination
under Section 3 of Competition Act providing for
Anticompetitive Agreement but this regulation will
cause more fair market practice.
-It has completed one year, during this period the
Commission received 61 notices out of which 56
notices have been cleared.
-These notices were cleared within the self-
imposed limit of 30 days.
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29. For Market to be just…….
For Market to be just…….
……..Competition is must
……..Competition is must
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30. Kalpeshkumar L Gupta
Academic Associate
IIM Ahmedabad
klgupta@iimahd.ernet.in
advocatekgupta@gmail.com
(c) K L Gupta