Commission revises long form for M&As, changes effective from May 1

Companies planning merger and acquisition (M&A) will have to disclose the extent of “complementary linkages” among them and their impact on the market.

This comes under the revised reporting requirements of the Competition Commission of India (CCI).

The changes will take effect on May 1.

Entities may also have to provide market-facing data of the past five years with respect to their market size, the market share of the parties, and also that of the competitors, along with customers and suppliers.

At present, they seek data for only one year.

The anti-trust watchdog has amended Form II, typically for cases requiring detailed examination, to assess the likely effect of combinations on competition in India.

In the case of less significant deals, Form I, or the short form, is filed.

It seeks basic information on mergers, and queries are fewer and generic.

“The amendment to Form II is aimed at removing duplicity and (limiting) the information requirement so that they remain focused and relevant to the objective of the assessment of a merger, suitably clustering the information on common subjects, streamlining the flow of information for better navigation and appreciating the material furnished in the notification,” the CCI said on Monday.

Welcoming the move, Vaibhav Choukse, partner (head of practice),  Competition Law, said this was likely to make merger-filing procedures more time-efficient and less cumbersome for the parties as well as for the CCI.

Talking about the key changes, Choukse pointed out the concentration analysis based on the four-firm concentration index (CR-4) and said the concentration ratio for the top four firms in a given relevant market had been also introduced.

The amendment has come at a time when the CCI has suspended the Amazon-Future deal for not disclosing all the required information.

Industry bodies are learnt to have reached out to the competition watchdog to seek clarity on disclosures to ensure M&A transactions do not face such issues.

The competition regulator said the amendment revised the content and format of information that the parties to a combination used to file where the post-combination market share exceeded 15 per cent in the case of a horizontal overlap and 25 per cent in the case of vertical interface.