Competition Commission of India introduces Green Channels for fast track approvals of Mergers & Acquisitions and certain Combinations

The Competition Commission of India (CCI) has set up Green Channels which will enhance the fast track approvals of certain Mergers and Acquisitions or Combinations. An amendment has been made by the CCI to the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (‘Combination Regulations’), thereby giving rise to Green Channels.

The object of the Green Channel is to sustain and promote a speedy, transparent and accountable review of combination cases, strike a balance between facilitation and enforcement functions, ensure compliance and support economic growth.

Regulation of mergers and acquisitions (M&A) above certain financial threshold (Combinations) is an important regulatory function of CCI. Since its inception, the regulatory body has cleared 666 combinations.

The CCI has also revised its pre-filing consultation guidance note to assist the parties in determining their eligibility for the Green Channel Route. A summary of the Combination should be submitted to the CCI for publishing on its website that shall include name of the parties, nature and purpose of the Combination, products, services and business of the parties amongst others.

Parties to a Combination can avail the Green Channel Route subject to various conditions, including that there is no horizontal overlap or vertical relationship.

The companies availing the Green Channel Route must ensure that they do not engage in production of identical products or providing similar services. Further, they should not be engaged in any activity relating to production, supply, distribution, storage, sale and service or trade in products which are in the stages of production. Finally, the companies should refrain from engaging in activities relating to trading in products or provision of services which are complementary to each other.