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Competition Commission Issues Final Regulations For ‘Combinations’
On 11 May 2011 the Competition Commission of India ("CCI") announced a set of regulations that would govern combinations in India. These regulations are termed as CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, ("Combination Regulations"). Taxand India provides an overview of the key aspects of the Combination Regulations.
For the purpose of this article the Competition Act and Combination Regulations have been collectively referred to as "Competition Law". The following themes are examined:
- Competition Law applies to significant combinations
- Applicability of Combination Regulations to ongoing combinations
- Coverage of transactions within the purview of Combination Regulations
- Guiding factors for ascertaining AAE on competition, and process flow
Anti-trust laws are present in most countries and are a key consideration for all significant deals. In recent times, India Inc has been a part of many large deals, both domestic and global, of which a few have triggered debates regarding impact on Indian markets. To illustrate, the Indian pharmaceutical sector has seen some significant deals, which triggered discussions regarding potential impact on this industry, and appropriate measures to regulate such takeovers. Combination Regulations (which are substantially in line with international anti-trust regulations) are a step in the right direction at the right time and seek to regulate big ticket M&A transactions, which could potentially have AAE on competition in India.
This revised set of Combination Regulations addresses various concerns raised by industry forums on the draft regulations released earlier, and provides some level of clarity on transactions, which would fall within the purview of Combination Regulations, or outside their purview. Competition Law is now here to stay in India, and the impact would need to be appropriately considered while embarking on significant M&A transactions.
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