Merger Control and Combinations

Client engagement

Down: 

1. These systems include all medicines intended for internal or external use, part of the traditional Hindu system of medicine and authoritative books. 

2. Small mesh tubes typically used to hold open passages in the body, such as weak or narrowed arteries. 

4. A small device that prevents the heart from beating too slowly, too fast, or with an irregular rhythm.

Across: 

3. A system in which medical doctors and other healthcare professionals (such as nurses, pharmacists, and therapists) treat symptoms and diseases using drugs, radiation, or surgery.

5. Any article intended to be rubbed, poured, sprinkled or sprayed on, or introduced into, or otherwise applied to, the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance. 

CCI approves the proposed acquisition in Tower Vision India Private Limited by Ascend Telecom and GIP EM

The Competition Commission of India (“CCI”), on May 3, 2023, has approved the proposed acquisition of Tower Vision India Private Limited by Ascend Telecom Infrastructure Private Limited (“Ascend Telecom”) and GIP EM Ascend 2 Pte Ltd (“GIP EM”), through a 100% acquisition of its shareholding. 

Ascend Telecom is engaged in the business of telecommunication services through towers in India whereas GIP EM is not presently engaged in any business activity. Pertinently, both companies are owned by various funds and investment entities that are managed by Global Infrastructure Management LLC. 

Tower Vision India Private Limited is controlled by Tower Vision Mauritius Limited and provides passive telecommunication infrastructure services through telecom towers in India.

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CCI approves the proposed acquisition of equity shares in Jaguar Advisory Services Private Limited by Sanjay Chamria

The CCI, on May 3, 2023, has approved Mr. Sanjay Chamria’s acquisition of certain equity shares of Jaguar Advisory Services Private Limited (“Jaguar”), constituting 51.11% of the total equity share capital of Jaguar, leading to an indirect acquisition of approximately 5.44% of equity share capital in Magma HDI General Insurance Company Limited (“Magma HDI”).

Mr. Sanjay Chamria would complete the investment through various entities that he owns, both listed and unlisted.  Jaguar is an Indian based corporation providing labour supply related services. Magma HDI, on the other hand, provides a comprehensive selection of general and non-life insurance products.

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CCI approves the proposed combination of Edelweiss (Acquirer 1), ESOF III (Acquirer 2) and Biocon Biologics deal (Target)

The CCI, on May 9, 2023, has approved the combination between Edelweiss Alternative Asset Advisors (“Edelweiss”) and ESOF III Investment Fund (“ESOF III”) in Biocon Biologics Ltd (“Biocon Biologics”) via subscription to certain compulsorily convertible debentures under the green channel route.  Pertinently, the activities of the parties do not exhibit any horizontal, vertical, or complementary overlaps in any of the plausible relevant markets in India.

Edelweiss is an alternative asset advisor, and ESOF III is an Alternative Investment Fund; both are registered with SEBI, whereas Biocon Biologics is a global biosimilar firm involved in the manufacturing and commercialisation of pharmaceutical formulations. 

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CCI approves the proposed merger of UBS Group’s absorption with Credit Suisse through the purchase of 3 billion Swiss Francs in stock

The CCI, on May 18, 2023, has approved the proposed merger of Credit Suisse Group AG (“Credit Suisse”) with UBS Group AG (“UBS Group”).  USB Group would be the surviving legal entity and Credit Suisse’s assets, liabilities, and contracts would be transferred to UBS in their entirety.

UBS Group and Credit Suisse are both investment banks and financial services companies founded and based in Switzerland with multiple offices across jurisdictions. The primary focus of UBS Group in India is on brokerage services, while Credit Suisse is primarily engaged in wealth management and investment banking services.

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Pricol and Minda approach Madras High Court over an alleged hostile takeover bid

The Madras High Court, on May 22, 2023, accepted the writ petition filed by Pricol Ltd (“Pricol”), wherein the validity of application made by Minda Corporation Ltd (“Minda”) to the CCI was challenged, requesting permission for making investment in equity shares of Pricol Ltd up to 24.5% of total equity shares.

Previously, on May 2, 2023, Minda had, following its acquisition of 15.7% stake in Pricol, moved to the CCI with an application to increase its stake to 24.5% of Pricol’s total equity shares.

Subsequently, on May 17, 2023, Pricol filed an objection with the CCI asking it to block their rival company Minda from moving forward with the purchase of its company stocks.

Both Pricol and Minda compete in the two-wheeler instrument cluster business, with Pricol having 40% market share and Minda retaining 15% market share.  Pricol has alleged that Minda’s attempt to purchase significant share in the company via an open market deal is hostile as they had rejected the earlier buyout offers from Minda.

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CCI approves proposed investments in Acko Technology by Multiples Fund III and CPHI-4

The CCI, on May 25, 2023, has approved the proposed acquisition of additional Series E compulsorily convertible preference shares of Acko Technology and Services Pvt Ltd. (“Acko Technology”) by Multiples Private Equity Fund III (“Multiples Fund III”) and CPP Investment Board Private Holdings (4) Inc. (“CPHI-4”).

CPHI-4 is a wholly-owned subsidiary of Canada Pension Plan Investment Board, which through its affiliates, has investments in various sectors such as public and private equities, real estate, infrastructure, among others. Multiples Fund III, which is managed by Multiples Alternate Asset Management Pvt Ltd, is a Category II Alternative Investment Fund registered with SEBI. 

Acko Technologies is a private company that provides technology and outsourced services, such as establishment, running, and managing data processing computer centres for development and implementation of technology products, and data communication systems processes and various general/non-life insurance services, including all round damage protection for electronic devices.

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JioCinema, Voot merger enters final stages, announcement expected post conclusion of the ongoing season of the Indian Premier League (IPL)

CCI had previously approved the merger between Reliance-owned JioCinema and Viacom18 Media-owned VOOT platform in September 2022. The merger has reached in its final stages and the companies are expected to conclude the proceedings and make an official announcement post the conclusion of IPL 2023.  It is relevant to note that JioCinema won the digital broadcasting rights to IPL 2023 for Rs. 23,757 crores. 

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Enforcement Matters

Google pays Rs. 1,338 crores penalty to the Competition Commission of India (CCI) in anti-competitive practices case

The NCLAT (“National Company Law Appellate Tribunal”) had previously issued an order directing Google to pay the prescribed penalty amount by the CCI, within a 30-days window. In furtherance to said order, Google has deposited the entire penalty amount of Rs 1,337.76 crore into the Consolidated Fund of India within the said deadline as directed.

The penalty imposed on Google was owing to the alleged abuse of their market dominance and imposition of certain unfair conditions, thereby attracting the violation of provisions against anti-competitive practices.  Furthermore, on May 17, 2023, Google announced that it will comply with the CCI order and cooperate with local proceedings and make changes to their billing policy in the Google Play Store.

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Supreme Court orders a stay on Rs. 202 crores penalty that the CCI had imposed upon Amazon

On May 8, Amazon moved the Hon’ble Supreme Court (“SC”) for obtaining relief against the notice issued by CCI directing the company to pay Rs 202 crores as penalty for suppression of pertinent information regarding the acquisition of 49% stake in Future Coupons Private Limited (“FCPL”) completed in 2019.

The CCI had approved the deal in 2019; however, upon receiving a complaint from Future Group, which owns FCPL, the CCI re-examined the transaction on suspicions of concealment of material information in respect thereof.  The results of the re-examination led to the CCI ordering Amazon to pay a fine for failure to disclose information regarding the actual scope and purpose of the acquisition while seeking the regulatory approval.

The stay order shall remain in effect until the next hearing of the matter before the SC, which is scheduled for June 17, 2023.

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Notable changes after implementation of new rules under the Competition Amendment Act 2023

On May 18, 2023, certain new rules under the Competition Act, 2002, notified by the Ministry of Corporate Affairs (“MCA”), were enforced.  Global companies are now required to notify the CCI of any merger and acquisition (“M&A”) if the deal value exceeds INR 2,000 crores and if the target firm has ‘substantial business operations in India’.

Additionally, it is now mandatory to deposit 25% of the fine imposed by CCI prior to filing any appeal against the order to discourage unnecessary appeals. The penalty against false claims has also been increased from Rs. 1 crore to Rs. 5 crores.

The amendments also include a ‘Leniency Plus’ scheme that encourages entities facing investigation for operating cartels to disclose the existence of other cartels in exchange for lower penalties

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CIL vs CII - case heard in the Supreme Court regarding exemption from Competition Act, 2002

The CCI approached the SC stating that Coal India Limited (“CIL”) cannot take refuge under Coal Mines (Nationalisation) Act, 1973. The major contention put forward by CIL has been that as a PSU, it is exempt from the Competition Act 2002, as it is mandated to act in the public interest.

Coal India Limited is a Public Sector Undertaking (“PSU”) established to consolidate and regulate the coal industry in India. This plea came after the CCI imposed heavy penalties on CIL for abuse of dominant market position, with the CCI maintaining in the Court that CIL was working solely for profits and not in public interest, stating that it has been ‘unilaterally fixing’ the terms of Fuel Supply Agreements (“FSA”) with different power companies.

During the court proceedings, in reply to the claims of immunity by CIL, the counsel for CCI argued that while exemptions are allowed under Section 54 of the Competition Act, the Government of India has not exercised its power in accordance with the same in the case of CIL.  

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Regulatory Updates

Centre Appoints Ms. Ravneet Kaur as the Chairperson of CCI

On May 16, 2023, the Appointments Committee of the Cabinet named Ravneet Kaur, a Punjab cadre IAS officer of 1988 batch, as the chairperson of CCI. Kaur, who took charge of the office on May 23, will hold the post for five years or until attaining the age of 65. She is the first woman to head the CCI.

A recent report by Standing Finance Committee of the Parliament reported that 67 of the 195 sanctioned posts were empty at CCI; however, these vacancies have not affected the productivity of the CCI.

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Members of IAMAI submit concerns to CDCL over the proposed regulations for digital markets.

While the Committee on Digital Competition Law (“CDCL”) is yet to submit its final report on the proposed regulations for digital market spaces, the members of the Internet and Mobile Association of India (IAMAI), on May 12, 2023, sent a written submission to CDCL expressing opposition to ex-ante regulations for digital markets in India.

Referencing the regulations under the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, IAMAI mentioned that the financial size-based thresholds would limit the growth and scaling up of Indian companies leading to reduction in value creation, as larger tech companies and start-ups will be disincentivised from scaling in order to avoid additional regulations.

CDCL was constituted on February 6, 2023 and given three months to formulate a report and draft the Digital Competition Act; however, after missing the original deadline of May 6, 2023, it was provided a one-month extension by the MCA. The latest meeting of CDCL was on May 24, 2023. The CDCL was additionally tasked with reviewing whether the existing provisions under the Competition Act 2002 and accompanying Rules and Regulations were sufficient to deal with emerging digital markets. It is likely that the tenure of the 10-member CDCL would be further extended by the Centre.

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Cabinet approves MoU between the CCI and Egyptian Competition Authority (“ECA”) under Section 18 of Competition Act, 2002.

India and Egypt seeking to build a robust mechanism decided to increase their cooperation in the competition ecosystem with the signing of a Memorandum of Understanding (“MoU”) between the CCI and the ECA.

The Union Cabinet, on May 17, 2023, approved the signing of an MoU that aims to bolster cooperation through a variety of means, including the exchange of information, sharing of best practices and capacity-building initiatives, which will allow both agencies to learn from each other’s experience and help in addressing cross-border competition issues and promote healthy competition in the global marketplace.

It is relevant to note that the CCI is permitted to enter into any memorandum or arrangement with any agency of any foreign country for purposes of discharging its duties or performing its functions under Section 18 of the Competition Act, 2002.

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