INDIA Law and Practice Contributed by: Anshuman Sakle, Anisha Chand, Pranjal Prateek and Soham Banerjee, Khaitan & Co
3.8 Pre-Notification Discussions With Authorities The Indian merger control regime provides transacting parties an opportunity to undertake a PFC with case officers at the CCI. A PFC is a confidential, oral and non-binding consultation which allows parties to dis - cuss interpretation issues or other aspects in relation to merger control with the officers of the CCI. A PFC can also be done to undertake pre-filing scrutiny of a merger notice to ascertain key issues or concerns that the CCI may have. The CCI encourages parties to avail themselves of the PFC mechanism prior to making the formal filing. The views provided by the CCI during the PFC are non- binding on the CCI. Further, in sensitive transactions, a PFC can also be undertaken on a no-names basis. 3.9 Requests for Information During the Review Process Typically, the CCI issues around one to two requests for information (RFI) during its review process. The scope of questions contained in each RFI depends on the level of disclosure made in the merger notice and the overall complexity of the filing. The issuance of a RFI by the CCI results in a clock- stop. Therefore, time taken by the parties to respond to an RFI are not calculated as part of the CCI’s review timeline. Ordinarily, once the parties submit a compre - hensive and complete response to the RFI, the clock re-starts. However, it is also possible for the CCI to issue a continuing RFI, in which case the clock will restart only on the submission of a comprehensive and complete response to the continuing RFI. 3.10 Accelerated Procedure Where there are no horizontal overlaps or vertical relationships or complementary linkages between the acquirer group and the target, the parties can secure an approval under the green channel route. Transac - tions notified under the GCR are approved immedi - ately upon the formal filing with the CCI. For non-green channel filings, transacting parties can further accelerate review using the following mecha - nisms.
• Pre - filing consultation – As set out in 3.8 Pre-Noti- fication Discussions With Authorities , parties can do a PFC to gauge possible concern areas with the CCI, responses to which can then be built into the notice while making the formal filing. This can reduce the level of inquiry from the CCI post-filing. • Voluntary modifications – Parties to a contentious transaction (which is likely to cause an AAEC) can offer voluntary modifications to the CCI during the Phase I stage itself to expedite review and shorten approval timelines. The substantive test employed to assess whether a transaction should or should not be approved involves determining whether a transaction results in an AAEC in the relevant market. To assess AAEC, the CCI relies on multiple factors to undertake a holistic assessment of a notified transaction. These factors can be seg - mented into anti-competitive or pro-competitive fac - tors. Anti - competitive factors include the following: • extent of barriers to entry; • significant increase in market concentration (including market shares); 4. Substance of the Review 4.1 Substantive Test • degree of countervailing power in the market; • elimination of competitors from the market; • possibility that the transacting parties can signifi - cantly and sustainably increase prices; • market structure (including nature of vertical inte - gration therein); and • possibility of any foreclosure (whether input or customer). Pro - competitive factors include: • nature and extent of innovation in the market; • possibility of saving a failing business; and • efficiencies/consumer benefits accruing on account of the transaction. If the CCI concludes that a transaction will result in an AAEC, it will typically attempt to arrive at a suit -
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