INDIA Law and Practice Contributed by: Anshuman Sakle, Anisha Chand, Pranjal Prateek and Soham Banerjee, Khaitan & Co
availing the minority acquisition exemption to avoid a filing. The acquisition carried a right to access commercially sensitive information, which rendered the exemption inapplicable. • The CCI penalised a large pharmaceutical com - pany to the tune of INR0.5 million (approximately USD5,228) for closing a transaction without seek - ing fresh CCI approval after the transaction struc - ture was modified subsequent to the receipt of the original CCI approval. • The CCI penalised a healthcare operator INR0.5 million (approximately USD5,228) for converting debt into equity without seeking CCI approval, even though the conversion was undertaken on account of financial hardship owing to extenuating circumstances. • The CCI penalised a global financial sponsor INR0.5 million (approximately USD 5,228) for wrongly availing the Green Channel Route (GCR) by failing to identify existing overlaps between the transacting parties. • The CCI penalised an integrated power sector entity for failing to notify a competitor acquisition. The bidding process was structured in a manner where CCI approval could not have been secured in a timely manner. Noting practical difficulties, the CCI did not impose a penalty on the power sector entity. 2.3 Types of Transactions Under the Competition Act, mergers, amalgamations and acquisitions (of shares, assets, control or voting rights) require prior CCI approval where the notification thresholds are exceeded and no exemption applies. Internal restructurings and reorganisations that cross the thresholds can typically avoid notification under the Exemption Rules. However, approval is required where such a restructuring results in a change of con - trol. A transaction that does not independently cross the notification thresholds will nonetheless require CCI approval if it is interconnected with another trans - action that breaches the notification thresholds. All interconnected transactions must be notified togeth - er through a single merger notice, and a composite
approval must be sought for all interconnected trans - actions. Transactions or changes in governance arrangements that do not involve a transfer of shares or assets can also trigger a filing requirement if they result in a change of control. For example, the acquisition of a standalone right to nominate a director, or to exercise certain affirmative voting rights, will require approval if the notification thresholds are met. 2.4 Definition of “Control” The Competition Act and precedents from the CCI clarify that control is a matter of degree, but all degrees and forms of control constitute “control”. Pertinently, more than 50% shareholding, or the abil - ity to control the majority of the Board of Directors, qualifies as de facto control. However, in the absence of de facto control, even special rights like the abil - ity to have board representation or affirmative voting rights or financial/structural linkages can also result in de jure control. Under the Indian merger control jurisprudence, mate - rial influence is seen as the lowest form of control. Material influence implies the presence of factors that provide the ability to influence the affairs and manage - ment of another entity. Acquisition of minority shareholding will typically require an approval from the CCI if it results in either the acquisition of control or a change in the quality of control being exercised. As set out above, in CY 2026, the CCI penalised a logistics sector operator for failing to notify a transaction involving a change in the nature of control, ie, from joint control to sole control. 2.5 Jurisdictional Thresholds Indian merger control prescribes two categories of notification thresholds: financial thresholds and the deal value threshold. Transactions that exceed any one of the financial thresholds or the DVT will need a mandatory approval from the CCI unless the transac - tion can avail itself of any exemptions. Financial Thresholds The financial thresholds consist of eight separate tests measuring either the combined assets or combined
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