Combination Regulations

In a recently released order, the Competition Commission of India (CCI) has imposed a token penalty of INR 5 lakhs (approx. USD 7800) on ITC Limited (ITC) for its failure to notify a combination. The combination relates to ITC’s acquisition of the trademarks “Savlon” and “Shower to Shower”, along with other related assets, from Johnson & Johnson by way of two separate asset purchase agreements entered into on 12 February 2015.

In its order, the CCI has held that trademarks are assets for the purposes of the Competition Act, 2002 (as amended) (Competition Act). Further, the order also re-emphasises the position that the Indian merger control regime relates to not only an acquisition of one or more enterprises but also acquisition of control, shares, voting rights or assets of another enterprise. In the event the jurisdictional thresholds prescribed under Section 5 of the Act are met, such an acquisition requires prior notification to, and approval from, the CCI.

Continue Reading The CCI Reinforces Trademarks are Assets

* This piece was first published in the November 2017 issue of the Practical Lawyer [(2017) PL (Comp. L) November 86]


Enforced in 2011, the Indian merger control regime envisages an ex-ante assessment by the Competition Commission of India (CCI) of all M&A transactions meeting certain financial thresholds provided in the Competition Act, 2002, as an anticipatory step to avoid potential anti-competitive outcomes such as creation of a monopoly or co-ordinated action by competitors. However, considering the need to avoid filing requirement for certain types of M&A transactions which are not likely to cause an appreciable adverse effect on competition, the CCI, by way of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations) exempted certain categories of M&A transactions from a notification requirement. One such exemption (provided in Item 1 of Schedule I to the Combination Regulations) deals with minority investments and exempts acquisitions of less than 25% shares, if they are made “solely as an investment” or in the acquirer’s “ordinary course of business”, with a categorical caveat that such transaction should not result in the acquisition of ‘control’ (25% Exemption).

Though the 25% Exemption may, at first glance, seem extremely advantageous to private equity and other financial investors, the verbose riders under Item 1 and various CCI orders, considerably limits its scope. More often than not, acquirers are willing to err on the side of caution and seek the CCI’s approval, to avoid monetary as well as reputational loss. This article highlights a few of the issues that are encountered when determining the applicability of the 25% Exemption and in particular, the phrase “solely as an investment”.

Continue Reading Antitrust Approval in Minority Acquisitions – A Case of Several Ifs and Buts