India’s Merger Control Overhaul – Key Trends & Challenges from 2024
The year 2024, has significantly altered India’s strategy for the control of merger regulations. New thresholds have been introduced along with stricter enforcement mechanisms and increased scrutiny over corporate transactions. Consequently, companies and investors had to cope with a more stringent regulatory environment that requires higher compliance and transparency. The Competition Commission of India (CCI) has also been instrumental in these new frameworks, providing more explicit precedents that will dictate the terms of future deals.
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Deal Value-Based Merger Filings: A Landmark Policy Shift
One of the most impactful regulatory changes has been the incorporation of a merger filing deal value threshold. Under this requirement, any deal valued over ₹2,000 crores and with a target entity having active business operations in India will now have to be notified to the CCI. This modification brings India’s regulatory framework in line with several more developed jurisdictions, which have moved towards assessing the economic value of a deal rather than relying solely on asset or turnover value benchmarks.
The policy’s objective is to capture value in transactions that are believed to be greater than traditional competitive measures, especially in the digital and technology spaces. Firms now engaging in significant acquisitions will need to ensure that their deals are compliant with this new condition.
Green Channel Approvals: Tighter Regulations and Increased Penalties
Like in previous years, the Green Channel route, intended for speedily approving mergers without competition overlaps, was popular amongst companies seeking efficiency. In 2024, 20 transactions were successfully cleared under this route. Now the CCI has started to apply much more stringent thresholds, especially by broadening the scope of who qualifies as an ‘affiliate’ to those with access to commercially sensitive information.
In 2024, one of the key cases involved The Motilal Oswal Group, which was penalized 10 lakhs due to erroneous filing under the Green Channel. This was the second consecutive year for penalization of a firm for misuse of this provision. In the past, the CCI was lenient enough to accept trivial overlaps. Now, they have adopted a much stricter, more objective approach which requires filing parties to restrict oversights internally before proceeding.
Difficulties for Private Equity and Investment Funds
Another movement in 2024 was with regard to greater focus on investment fund supervision, particularly with the activities of limited partners (LPs). The CCI had started a new policy that required overlap analysis between any LP investment and the target company, a new compliance burden for private equity and venture capital firms.
Funds granting such unusual rights to LPs have Board voting rights or participation in strategic decisions may find it more difficult to obtain approval. The investment funds are so broad that this requirement will result in more stringent due diligence and documentation which increases regulatory burden on dealmakers.
Conglomerate Mergers Under Closer Examination
In a significant policy shift, the CCI applied a conglomerate effects analysis in its review of Hewlett Packard’s acquisition of Juniper Networks. The regulator examined how the merger would impact competition beyond direct market overlaps, particularly in the networking solutions segment, where HP’s portfolio was expanding into areas previously dominated by Juniper.
The CCI relied on bidding data and market share analysis to determine the potential impact of this deal. This approach signals an increasing focus on non-horizontal mergers, suggesting that future large-scale acquisitions may face additional scrutiny, even if they do not result in direct competitive overlaps.
2025: What Lies Ahead for Indian Merger Control?
With over 130 transactions reviewed in 2024 and new amendments reshaping the regulatory landscape, the coming year will be crucial for businesses navigating India’s merger control framework. The industry has already raised concerns over the broad scope of deal value thresholds, prompting calls for greater clarity through official guidance or case precedents.
Additionally, the shorter review timelines introduced in 2024 may present operational challenges for the CCI, especially with an increased caseload. The regulator will need to strike a balance between ensuring swift approvals and conducting thorough competition assessments.
As India continues to refine its merger control regime, companies must remain proactive, ensuring that compliance measures are aligned with these evolving regulatory expectations. 2025 will be a defining year, shaping the future of competition law enforcement in India.
King Stubb & Kasiva,
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