INDIA Trends and Developments Contributed by: Vaibhav Choukse, Ela Bali, Nripi Jolly and Faiz Siddiqui, JSA
(USD232.83 million) and the target has “substan - tial business operations in India” (SBOI). The CCI (Combinations) Regulations, 2024 (the ”Combi - nation Regulations”) sets out the methodology for computing the VOT and the scope of the SBOI. The VOT must include all forms of valuable con - sideration – whether direct or indirect, immediate or deferred, cash or non-cash – including but not limited to consideration: • for any covenant, undertaking, obligation or restriction imposed on any party; • for all interconnected transactions; • for arrangements entered into as part of the transaction, including incidental arrange - ments such as technology assistance, as well as licensing of IP rights within two years of the closing of the transaction; • for transactions involving call options, assum - ing full exercise; • payable as per best estimates based on future outcomes specified under the transac - tion documents; • for any acquisition by one of the parties or its group company in the target being acquired or merged (or amalgamated) during the previ - ous two years from the date of execution of transaction documents in the case of acquisi - tion and approval of resolution by the board of directors for merger/amalgamation (“trigger event”); and • in the case of implementation of an open offer, assuming its full subscription. If the VOT is not specifically stated in the trans - action documents, the value approved by the board of directors or other approving author - ity will be considered. In the absence of both, the highest payable amount will serve as the best estimate. Where the board or approving
authority cannot reasonably determine the VOT, it will be presumed to exceed INR2,000 crores (USD232.83 million). The FAQs inter alia clarify that the VOT must be computed as follows: • share swap – the VOT must include the aggregate value of both the share acquisi - tions; • call/put option – only the value of a call option must be included in the vot, not that of a put option; and • follow-on/ additional investments – value of “possible” future follow-on investments are to be included as per best estimates unless they were not contemplated at the time of the transaction. The target will be deemed to have SBOI if: • its gross merchandise value (GMV) in India for 12 months preceding the trigger event con - stitutes at least 10% of its global GMV and exceeds INR500 crores (USD58.21 million); or • its turnover in India during the financial year preceding the trigger event is at least 10% of its global turnover and exceeds INR500 crores (USD58.21 million). For digital services (eg, e-commerce platform services, cloud services), the target will be deemed to have SBOI if: • its average number of business or end users in India in the 12 months preceding the trig - ger event is at least 10% of its global busi - ness or end users; or • its GMV in India in the 12 months preceding the trigger event is at least 10% of its global GMV; or
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