The Competition Commission of India (CCI) has set a benchmark for regulatory efficiency with its swift handling of merger and acquisition (M&A) filings, as revealed in its Annual Report for FY 2023-24. 

The average number of working days for merger clearance was just 16 days, a significant improvement compared to previous years. 

This rapid turnaround time underscores CCI’s commitment to fostering a dynamic and competitive market environment while ensuring fair play.

“Green Channel” gains traction

Introduced in August 2019, the Green Channel Scheme has emerged as a game-changer for facilitating M&As. This innovative approach allows automatic approvals for eligible combinations where there are no horizontal, vertical or complementary overlaps, ensuring minimal procedural delays for businesses. 

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Since its inception, 100 combination notices have been filed under the scheme. Despite a slight dip in Green Channel usage from 27 percent in FY 2021-22 to 22 percent in FY 2023-24, the scheme remains a popular route for businesses seeking speedy clearances.

Pre-Filing Consultations

The CCI offers pre-filing consultation as a voluntary mechanism to provide guidance to parties considering merger filings. This initiative allows businesses to engage with the CCI informally before submitting a formal notice, helping them navigate procedural complexities and ensure compliance with regulatory requirements. During these consultations, parties can seek clarifications on the appropriate filing form, documentation requirements, and preliminary competition concerns. 

While non-binding, pre-filing consultations foster transparency, reduce errors in filings, and expedite the subsequent review process, making them a valuable tool for stakeholders to achieve regulatory certainty and seamless clearance. This proactive approach underscores the CCI’s commitment to facilitating ease of doing business while maintaining robust competition oversight, said CCI watchers.

A modernised approach to M&A

The Competition Amendment Act 2023 introduced a deal value threshold for notifying mergers and acquisitions, aiming to capture high-value transactions in digital and new-age markets. 

The CCI’s stringent yet efficient processes also reflect its ability to balance the need for competitive oversight with a business-friendly approach. The report highlights that any combinations likely to cause an appreciable adverse effect on competition (AAEC) are thoroughly scrutinized, and suitable modifications are proposed to mitigate competition concerns.

Catalyst for inorganic growth

The CCI’s expeditious reviews have provided a significant boost to inorganic growth strategies for companies across sectors. The reduction in review timelines, combined with initiatives like the Green Channel, has reduced regulatory uncertainty, enabling businesses to execute deals swiftly.

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Industry analysts attribute the growing confidence in CCI’s mechanisms to its transparent processes and robust competition analysis. “The CCI’s focus on reducing review timelines without compromising on the quality of assessments is commendable. This encourages businesses to explore M&A opportunities as a viable growth strategy,” said a M&A expert.

Challenges and the road ahead

While the numbers reflect a well-oiled regulatory machinery, the Commission’s report also highlights the evolving complexity of M&A filings, especially in digital markets. The upcoming implementation of the deal value threshold is expected to further refine the CCI’s approach to regulating market combinations.

With a commitment to efficiency and fairness, the CCI is poised to continue its role as a key enabler of India’s economic growth story. 

Its focus on fostering competition, coupled with modernized regulatory frameworks, ensures a thriving environment for businesses seeking to expand through mergers and acquisitions, economy watchers said.