New Delhi: The Competition Commission of India (CCI) on Wednesday notified regulations requiring corporates to seek its approval before going in for high value mergers and acquisitions.
As per the notification, the CCI will take a view on the proposed merger deals within 180 days of the filing of notice by the companies.
The regulation -- Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 -- shall come into force from 1 June 2011, the competition watchdog said.
The parties would have to submit a fee of up to Rs1 lakh for getting the CCI approval.
“The CCI Act empowers the Commission to regulate combinations which have caused or are likely to cause appreciable adverse effect on competition,” it said.
According to the regulation, the Commission can either approve the merger proposal, reject it or modify it.
The regulations follow the notification of Section 5 and 6 of the Competition Commission Act, 2002, dealing with mergers and acquisition in March by the government.
According to the provisions in the Act, companies with a turnover of over Rs1,500 crore will have to approach the CCI for approval before merging with another firm.
Only those proposals would need the CCI’s nod where the companies have combined assets of Rs1,000 crore or more, or a combined turnover of Rs3,000 crore or more, as per the Act.
Also, the target company’s net assets have to be a minimum of Rs200 crore or it should have a turnover of Rs600 crore for CCI intervention.
The CCI has held wide consultations with the industry bodies and law experts before coming out with the final regulations.
The Commission became fully functional in 2009, with the appointment of a chairman and six members. At present, it has the power to check anti-competitive agreements and abuse of dominant position, drawn from Sections 3 and 4 of the Competition Act, 2002.