LEGAL FRAMEWORK

& CASE STUDIES

1 RULE 8 OF THE COMPANIES 2
SEC. 232 OF THE COMPANIES ACT,
(COMPROMISES, ARRANGEMENTS &
2013
AMALGAMATIONS) RULES, 2016
Primarily concerned with mergers
Provides for the requirement of
and amalgamations of companies in
sending notice of the merger to the
India.
CCI.
Relevant in the given case in light of
For every merger, arrangement or
the fact that DCU Ltd. wishes to
amalgamation, the involved
acquire MCU Ltd.
companies need to keep CCI in the
If the companies get a go-ahead
loop in order to enable it to examine
from the CCI, the arrangement to be
plausible concerns relating to
undertaken as per Sec. 232.
competition.

3 SEC. 6(1) OF THE COMPETITION ACT, 4

SEC. 5 OF THE COMPETITION ACT,
2002
2002
Prohibits the companies from
Defines combination as any
entering into any form of
acquisition, merger or amalgamation
combination, which has or is likely to
that meets certain asset or turnover
have an AAEC in the relevant market
thresholds.
in India, and treats all such
Relevance can be derived from the
combinations as void.
fact that, as per the CCI, the
Here, as the CCI is viewing the
proposed acquisition of MCU Ltd. by
proposed combination as a merger
DCU ltd. meets the given threshold
which may have AAEC in the
thereby coming within the ambit of a
relevant market, Sec. 6 assumes
“combination”.
relevance.

5 SEC. 20(4) OF THE COMPETITION ACT, 6

SEC. 6(2) OF THE COMPETITION ACT, 2002
2002
Lays down the factors CCI’s
Lays down the requirement of consideration in determining
sending notice of the proposed whether the proposed combination
combination to the CCI. is likely to have an AAEC in the
Since, the thresholds as prescribed relevant market.
u/s 5 of the Competition Act, 2002 Basis these factors, the CCI has
are being met with, the companies opined that the proposed
are obligated to comply with Sec. combination between DCU Ltd. &
6(2) of the Act. MCU Ltd. may have an AAEC in the
relevant market.
 LEGAL FRAMEWORK
& CASE STUDIES
7 SEC. 29 OF THE COMPETITION ACT,
2002
Power to issue a show cause notice
to the companies where the CCI is
prima facie of the opinion that the
proposed combination is likely to
cause an AAEC in the relevant
market.
Vests the power to conduct
investigations in respect of such
combinations, which it is of the
opinion, is likely to cause an AAEC in
the relevant market.
9
REGULATION 5 OF THE COMPETITION
COMMISSION OF INDIA (PROCEDURE
IN REGARD TO THE TRANSACTION OF
BUSINESS RELATING TO
COMBINATIONS) REGULATIONS, 2011
Lays down the requirement of giving
notice of the proposed combination
by the parties to the combination, to
the CCI .
In the present case, DCU Ltd. & MCU
Ltd. have filed a notice intimating the
CCI of the proposed combination
under Form 1.
REGULATION 25 OF THE
11
COMPETITION COMMISSION OF INDIA
(PROCEDURE IN REGARD TO THE
TRANSACTION OF BUSINESS
RELATING TO COMBINATIONS)
REGULATIONS, 2011
Power to suggest modifications to
the proposed combination where
the same has or is likely to have an
AAEC in the relevant market.
SEC. 31(3) OF THE COMPETITION ACT, 8
2002
Where the CCI is of the opinion that
the combination has, or is likely to
have, an AAEC but the same can be
eliminated by suitable modification,
it may propose appropriate
modification to the combination.
In the present case, the CCI has
proposed a structural remedy in the
form of divestment which can be
undertaken by the parties to the
combination.
REGULATION 19 OF THE 10
COMPETITION COMMISSION OF INDIA
(PROCEDURE IN REGARD TO THE
TRANSACTION OF BUSINESS
RELATING TO COMBINATIONS)
REGULATIONS, 2011
Authorizes CCI to form a prima facie
opinion under Sec. 29(1) of the Act,
on the notice filed in Form I as to
whether the combination is likely to
cause or has caused an appreciable
adverse effect on competition within
the relevant market.
REGULATION 28 OF THE 12
COMPETITION COMMISSION OF INDIA
(PROCEDURE IN REGARD TO THE
TRANSACTION OF BUSINESS
RELATING TO COMBINATIONS)
REGULATIONS, 2011
Power of the CCI to approve the
combination after inclusion of
suggested modifications.
LEGAL FRAMEWORK
& CASE STUDIES
Culver Max Entertainment Private Limited (Sony) / Bangla Entertainment
Private Limited (a wholly-owned subsidiary of Sony) (BEEPL) / Zee
Entertainment Enterprises Limited (ZEE)

In the merger between Sony & Zee, the CCI noted that television
advertising has the highest market penetration in India, and that the
amalgamated entity would become the largest broadcasting house in India.
Subsequently, the parties voluntarily offered to divest ZEE’s ownership in
three Hindi-language channels i.e., Big Magic and Zee Action and Zee
Classic and undertook not to divest the channels to the next two largest
competitors operating in the market segments.

Sun Pharmaceutical Industries Limited / Ranbaxy Laboratories Limited

Here, in response to the CCI’s concerns relating to the proposed

combination resulting in an AAEC in the relevant market, the companies
agreed to divest certain assets, including specific brands and
manufacturing facilities. Sun Pharma divested several brands and products
that were seen as overlapping or causing antitrust concerns. This included
specific pharmaceutical formulations and drugs marketed by both Sun
Pharma and Ranbaxy.

Bayer / Monsanto / KWA Investment Co.

CCI approved the transaction subject to a detailed modification plan that

included divestments and voluntary commitments by Bayer. The CCI
directed the divestment of two businesses of Bayer – its global glufosinate
ammonium business and global broad acre crop seeds and traits business
– to an approved purchaser and accepted the following voluntary
commitments: (1) exercise broad licensing policies in India; and (2) not to
offer clients bundled products.

China National Chemical Corp. / Syngenta AG

Here, the CCI granted an approval subject to a remedy proposal offered by

the parties wherein they voluntarily agreed to treat two of their respective
Indian subsidiaries as separate independent businesses for seven years, in
addition to divestment of three formulated crop protection products sold
by Syngenta in India.