The short answer
In India, the Competition Act, 2002 requires certain acquisitions, mergers and amalgamations, called combinations, to be notified to the Competition Commission of India and approved before they are completed. Whether a deal is caught depends on size tests based on the parties' assets and turnover, a test based on the value of the deal, and a set of exemptions. Many mid market deals fall outside the regime, but you should confirm that with a competition lawyer before signing, because closing a notifiable deal without approval can attract penalties.
The situation
A Bengaluru private equity fund is screening targets in speciality chemicals. One target, a Vadodara company, would be combined with a business the fund already owns. Another is a small company with modest revenue but a high price, because of its patents and its customer list. The fund's deal team wants to know, at the screening stage, which deals might need CCI approval and how long that could add.
How the regime works in general terms
Combinations and notification
The Act treats acquisitions of shares, voting rights, control or assets, and mergers and amalgamations, as combinations when they cross the size tests. A combination that crosses them must be notified, and it cannot take effect until the CCI approves it or the review period set by law ends. This is often called a suspensory regime: you file, then wait, then close.
The size tests
The tests look at the combined assets and turnover of the parties, in India and worldwide, at both the level of the parties and of the wider group. The figures are set in the Act and adjusted by government notification from time to time, so always check the current notification on the CCI website.
The deal value test
Amendments made by the Competition (Amendment) Act, 2023 added a test based on the value of the transaction. A deal above the set value can be notifiable even when the target's assets and turnover are small, provided the target has substantial business operations in India. This matters most for technology, digital and intellectual property heavy targets, where price is high relative to revenue.
Exemptions
There are exemptions, including one for small targets whose assets or turnover fall below set levels, and categories of transactions that are treated as ordinarily unlikely to harm competition, such as some acquisitions made solely as an investment, intra group restructurings and certain minority acquisitions. Each has conditions, and they have been revised over time. Your lawyer will read the current text against your facts.
What the CCI looks at
When a deal is notified, the CCI assesses whether it is likely to cause an appreciable adverse effect on competition in India. In practice that means looking at the markets where the parties overlap, their combined share, the position of competitors, and vertical links such as one party supplying the other. Most notified deals are approved without changes. Some are approved with modifications, and a few go through a longer review.
Green Channel
For deals with no horizontal, vertical or complementary overlaps between the parties, the CCI's Green Channel route allows a deal to be treated as approved on filing, subject to the parties' declaration being accurate. It is useful where it fits, and the self assessment has to be done carefully.
How it affects your deal
Timetable
If a filing is needed, the SPA will usually make CCI approval a condition precedent, and the long stop date must allow for the review. Preparing the filing itself takes time: market definitions, overlap data and group information all have to be gathered.
Gun jumping
Taking steps that amount to completing the deal before approval, such as transferring shares, taking control of commercial decisions or integrating teams, can be treated as gun jumping and attract penalties. Pre closing conduct clauses and integration planning should respect that line. Our guide on the first hundred days after the deal assumes closing has happened.
Information sharing between competitors
Where buyer and target compete, sharing current prices, customer terms or strategy during diligence can raise competition concerns of its own. A clean team, a small group with restricted access to sensitive data, is a common way to manage this. Role based folders in the data room help enforce it.
A screening checklist
At the first look at any target, record:
- the parties and their groups, for the size tests
- the target's assets and turnover in India
- the expected deal value, including deferred and contingent amounts
- whether the target has substantial operations in India
- overlaps and vertical links with the buyer's existing businesses
- any exemption that might apply, with the conditions noted
How the Bengaluru fund applies this
In this sample case, the fund's counsel flags the Vadodara deal as likely notifiable because it combines with an existing portfolio company in the same market, and the deal team builds the CCI review into the timetable and the SPA conditions. The patent heavy target is reviewed against the deal value test, and counsel asks for evidence of its Indian operations before advising. Neither conclusion is made on the deal team's own reading.
Where Synerger fits
Synerger's deal pipeline lets you record merger control status as a field on each target, and the due diligence module supports restricted folders for a clean team, with an audit trail of who opened what. For structuring support, see our mergers and acquisitions advisory or contact us.
General information; thresholds and exemptions change, so confirm with a competition lawyer.