Author: Aarti Sharma, Amity University Raipur Chattisgarh

The merging and acquisition deals, whenever carried out, bring to attention not only the companies involved but also the probable effect they might have on the whole market competition. The CCI's primary concern is always the prevention of monopolistic practices by the companies and the maintenance of the consumer’s welfare. The M&A activity across the globe considerably slowed down, but India was still the brightest spot. The mergers and acquisitions in the country were almost two times higher, and the financial criterion was so high that at the end of the year the M&A activity was about the same as the previous year. As a result, the CCI had to increase its merger notification threshold as it was mainly the authority responsible for analyzing transactions where the parties were to notify above the limit with a combined valuation. The stream of mergers and acquisitions is often spoken of as the “largest” and “most influential” occurrence in the landscape of American corporate giants. The market of making deals is characterized by the presence of audacious financial sponsors who are willing to break the barriers in the buyout sector and companies with poor credit ratings that are left with no choice but to draw in funds instead of merging. The Integrated International Oil Companies (IOCs) and National Oil Companies (NOCs) or Big Oil had, even prior to the market crash, divulged their plan to consolidate.When it came to the Indian scenario, the CCI was an effective intervener in the last two decades providing the sector with its guidelines and focusing on the quality of core new industries such as technology, pharmaceuticals, and manufacturing, to name a few. The CCI became a reliable authority for the companies seeking its approval before they could even think of dealing with their competing firms. The Indian Financial Sector was in need of coordination as the banking sector was going through a tough phase because of the bad loans piling up and poor asset quality.

The structure for merger control is primarily found in Sections 5 and 6 of the Competition Act, 2002: Section 5: stipulates the criteria “combination” (merger or acquisition) in terms of thresholds based on assets or turnover. Section 6: imposes a ban on combinations that are likely to lead to AAEC in the relevant market.Companies that reach the specified limits are required to notify the CCI prior to the merger. With the Competition Amendment Act of 2023, a “deal value threshold” of ₹2,000 crore has been introduced which focuses on and guarantees that even digital and technology-driven mergers (having low assets but high value) would come under scrutiny.Moreover, the Act offers a “green channel” path for certain non-problematic mergers which in turn results in quicker approvals and management of delays.

Over the years, several high-profile mergers have tested the effectiveness of India’s competition law.

1. Reliance – Disney JV merger: The 2024 merger of Viacom 18 (RIL) and star India (Disney) created a joint venture that is the largest media industry merger in India valued at approximately $8.5 billion

2. Vodafone - Idea merger: These 2018 merger valued at approximately rupees 1.5 lakh crore involved navigating complex regulatory approval process and is a significant case for how companies can consolidate market share and operational synergies in a heavily regulated market 

3. Tata Air India – vistara merger: The recent acquisition of Air India by the TATA group is being followed by a merger with Vistara which will create a dominant player  in the Indian aviation market.

These cases showed how CCI’s decisions directly shape market structures and corporate strategies.

India’s competition law has made companies more careful in planning mergers. Businesses now conduct detailed competition law checking before announcing deals.

1. Strategic Planning: Firms often change transactions to fall within allowed limits.

2. Market Diversification: Instead of combining within a single sector, companies look into merging across different sectors to avoid being too dominant.

3. Compliance Culture: Legal and adherence teams are now a key part of merger and acquisition planning.

Thus, competition law has not only shaped the result of mergers but also influenced how businesses design their growth methods.

In India, the competition law has become a factor that business firms need to measure carefully when planning mergers. Presently, the corporations are conducting very detailed investigations into competition law before announcing their agreements.1. Strategic Planning: Organizations invariably modify agreements to meet the permissible limit.2. Market Diversification: Firms are free to merge outside a single industry and are thus prevented from becoming too strong by using different industries.3. Compliance Culture: Legal and compliance departments are now seen as an integral part of the M&A planning process.Thus, competition law has not only influenced the outcome of mergers but also the growth strategies of the firms.

The Competition (Amendment) Act, 2023 made a few significant modifications among which the following stand out:

1. Deal Value Threshold (Transaction size limit): It is a new regulation that guarantees the merger and acquisition in the digital arena are thoroughly scrutinized by the competition watchdog in India, CCI.

2. Reduced Timelines: The CCI has now to give its opinion on the case’s validity (prima facie opinion) within 30 days of receiving the complaint, which makes the process much quicker.

3. Enhanced Penalties: There is now a structure of fines which is much larger and more complex, if a company does not notify the CCI about its mergers/acquisitions (mergers/acquisitions) when it is required to do so.

4. Settlement and Commitments: This novel option permits the company to resolve its competition issues at an early stage by either agreeing to a settlement or making a commitment  (promise to change) their behaviour so that they can avoid long-drawn-out legal battles.These reforms are a clear indication that India is aspiring to very high international standards in this regard, though at the same time, it is dealing with its own, country-specific, problems.

1. In the European Union (EU) , the joining of companies is evaluated based on how they will affect the competition in the single market. The EU is reputed for its stringent monitoring, where even giants like Google and Microsoft have had difficult reviews.

2.  In the United States, mergers are under the supervision of the Federal Trade Commission (FTC) and the Department of Justice (DOJ), who will consider mainly the benefits to the consumers and innovation as the main factors.

3.  India’s system is still in the process of development in comparison to these. It is not as aggressive as the EU, but still more than many developing countries, thus representing a middle approach between expansion and regulation

India's competition law that bans monopolistic practices has been a major factor in the regulation of corporate mergers. The law authorizes the Competition Commission of India to scrutinize mergers and acquisitions thereby guaranteeing that companies will grow without impairing consumer welfare or creating an unfair market. The past landmark cases, the changing boundaries, and the recent amendment are all indicative of India's commitment to establishing a robust regulatory framework.

On the other hand, the future will determine if the tighter scrutiny will foster competition or rather slow down the process. In as much as India is planning to take the lead as a global investment destination, how its competition law will work in allowing fair and quick mergers will be crucial for the country's economic growth.