The Ministry of Corporate Affairs ( MCA ) has introduced new threshold limits for determining combinations under the Competition Act, 2002, with the notification of the Competition ( Minimum Value of Assets or Turnover ) Rules, 2024.
These rules, which come into effect on September 10, 2024, set the minimum value of assets and turnover that will determine whether a merger, acquisition, or amalgamation qualifies as a “combination” subject to scrutiny by the Competition Commission of India ( CCI ).
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According to the new rules, any combination involving companies with assets worth ₹450 crore or more, or those with a turnover of ₹1,250 crore or more, will be subject to assessment under Section 5(e) of the Competition Commission Act.
The CCI, which is tasked with regulating and promoting competition in the Indian market, assesses combinations to prevent the creation of monopolies or other situations that could harm the competitive environment.
Along with these Minimum value rules, the MCA also notified the Competition ( Criteria for Exemption of Combinations ) Rules, 2024. Under the new rules, acquisitions of shares by underwriters or stockbrokers registered with the Securities and Exchange Board of India ( SEBI ) or similar authorities are exempt, provided the shares acquired do not exceed 25% of the total shares or voting rights. Similarly, mutual funds registered with SEBI are permitted to acquire up to 10% of shares or voting rights without triggering the combination requirements.
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Further it also notified new Competition Regulations for Combination Exemptions with effect from 10th September 2024. The regulation comprises the 3 schedules and also contains 4 forms.
Read More: Govt Introduces New Competition Regulations for Combination Exemptions
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