INDIA Law and Practice Contributed by: Anshuman Sakle, Anisha Chand, Pranjal Prateek and Soham Banerjee, Khaitan & Co
2.9 Market Share Jurisdictional Threshold The Indian merger control regime does not prescribe a market share-based notification threshold. Pertinently, the CCI cannot review transactions which will result in high market shares or will likely have prob - lematic competitive impact, if the transaction either (i) does not breach any one of the notification thresholds or (ii) is eligible for any available exemption. 2.10 Joint Ventures Formation and/or capitalisation of a green-field joint venture does not require an approval from the CCI. However, transfer of assets to either a green field or a brown field joint venture will require an approval from the CCI if any one of the notification thresholds are met. Importantly, the scope of operations of the joint ven - ture or the type of clients proposed to be served by the joint venture are not germane for determining noti - fication requirements. 2.11 Power of Authorities to Investigate a Transaction The CCI is not empowered to review transactions which do not exceed any one of the notification thresh - olds – even if such transactions are voluntarily brought before the CCI by the parties themselves or third par - ties. That said, the CCI does regularly reach out to parties who have been parties to publicly announced transactions to enquire why a notification was not made. If the CCI concludes that the transaction ought to have been notified, it can require the parties to file on a post-facto basis within one year of closing. Such transactions are also likely to attract gun-jumping pro - ceedings. No specific limitation period applies to the initiation of an inquiry by the CCI under Section 43A. 2.12 Requirement for Clearance Before Implementation A notifiable transaction cannot be consummated in part or whole before the receipt of an approval from the CCI. Partial consummation includes exercis - ing control over activities of the target, prepayment of consideration, and implementation of transaction outside India.
2.13 Penalties for the Implementation of a Transaction Before Clearance As set out above, implementation of a transaction (whether in part or whole) prior to receipt of CCI approval can result in gun-jumping. The CCI strictly enforces standstill obligations and scrutinises trans - actions (specifically, multi-step transactions) to ensure that parties do not breach standstill obligations prior to its approval. Details of penalties imposed by the CCI for gun-jump - ing in CY 2025 and CY 2026 are set out in 2.2 Failure to Notify . Previously, the CCI has imposed penalties on trans - acting parties (in foreign-to-foreign transactions) for implementing the transaction prior to receipt of approval. Penalised parties include (i) Titan Interna - tional Inc (which related to the acquisition of share - holding in Titan Europe PLC) and (ii) Baxalta Incorpo - rated (which related to the acquisition of bioscience business and related assets of Baxter International Inc). 2.14 Exceptions to Suspensive Effect Whilst the CCI has exhibited a tendency to expedite approvals in transactions concerning financially dis - tressed entities, there are no formal exceptions to the suspensory effect. There are no legislative require - ments/directions to expedite approval for transactions involving targets in distress. The CCI has consistently acted against parties closing without prior approval, even where the target’s finan - cial distress was advanced as justification for expedit - ing the transaction without seeking approval (see 2.2 Failure to Notify ). A similar approach has also been taken in public bid cases. Where the bid timetable left no realistic window to obtain prior CCI approval, the CCI has consistently imposed gun-jumping penal - ties for failing to seek CCI approval, treating the com - mercial constraints of the bid process as a mitigating factor rather than a defence. Thus far, there has only been one case where the CCI has imposed a zero penalty despite observing gun-jumping, ie, violation of applicable law.
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