COMBINATION –

CONCEPT AND
REGULATIONS
Presented by:
Rashi Rajgopal
21020049
 COMBINATION

Under the meaning of the Competition Act, 2002

a combination refers to the direct or indirect acquisition of the shares,

voting rights or assets or the control over management or control over

assets of one or more enterprises by one or more persons, or, a merger

or amalgamation between enterprises, when the combining enterprises

jointly exceed certain thresholds set under Section 5 of the Act.

 TYPES OF COMBINATION

■ Horizontal Combination

■ Non-Horizontal Combination
– Vertical Combination
– Conglomerate Combination
 HORIZONTAL COMBINATION
• Horizontal Combinations refer to combinations where the combining

enterprises are competitors having an identical level of production process

and produce substitute goods.

• These are friendly combinations between enterprises dealing with the

production of substitute goods.

• Such combinations are beneficial for the combined enterprise as it reduces

the competition in the market.

• However, horizontal combinations often lead to monopolistic tendencies in

the market.
 VERTICAL COMBINATION
• Vertical Combinations refer to combinations where the combining enterprises

are engaged in different levels of the manufacture and production process and

such enterprises unite into an interacting whole.

• When an enterprise or person has already direct or indirect control over

another enterprise engaged in production, distribution or trading of a similar or

identical or substitutable goods.

• Such combinations improve the efficiency and effectiveness of the production

process, increase the combination’s competitiveness in the market 

 CONGLOMERATE COMBINATION

• Conglomerate Combinations refers to the combination of enterprises that are

engaged in business markets that are completely unrelated to one another.

• Such combinations take place when two enterprises providing different products

in varying sectors of business are integrated together.  

 FINANCIAL THRESHOLD OF COMBINATIONS

In Case Of
Acquisition

Resultant
Group
Enterprise

In India International India International

Asset Turnover Assets > T/O

>6000Cr $1billion T/O >$3billion Assets
> 2000Cr (with 3000Cr in >$12billion
(with 1000Cr >$4billion (with (with 3000Cr
India) 1000Cr in India)
in India) in India

Assets > T/O >

8000Cr 24000Cr
 In case of
Acquisition by
person having some
control over
enterprise

Resultant
Group
Enterprise

In India International India International

Asset Turnover Assets > T/O

>6000Cr T/O >$3billion Assets >$4billion >$12billion
> 2000Cr $1billion
(with 3000Cr in (with 1000Cr in (with 3000Cr in
(with 1000Cr India) India
in India) India)

T/O >
Assets > 24000Cr
8000Cr
 In case of
Merger/
Amalgamation

Resultant
Group
Enterprise

In India International India International

Asset Turnover Assets >

T/O >$3billion T/O
> 2000Cr >6000Cr $1billion Assets >$4billion >$12billion
(with 3000Cr in (with 1000Cr in
(with 1000Cr India) (with 3000Cr in
in India) India) India

Assets > T/O >

8000Cr 24000Cr
REGULATION OF COMBINATIONS

• Once any acquisition, amalgamation or any merger has been categorized

as a combination, it has to follow the regulations provided in Section 6 of

the Competition Act, 2002.

• Section 6(1) prohibits the formation of combinations that are likely to

have an appreciable adverse effect on competition in the relevant market

in India and further declares that such combinations should be deemed

void.
Now subject to the prohibition laid down in Section 6(1) of the Competition Act, if any
person or enterprise wishes to form a combination, formation of a combination is
possible with the approval of the Competition Commission Of India. 
The following procedure is required to be followed before the Competition Commission
of India passes an order of approval or rejection with respect to the proposed
combination:

1. Submission of Notice to CCI

2. Disposal of Notice by CCI

3. Passing of order by CCI

 SUBMISSION OF NOTICE TO CCI
• As per Section 6(2) of the Competition Act, any person or enterprise who
proposes to enter into a combination has to mandatorily provide a notice to the
Commission
• The notice has to be given to the Commission within thirty days of receiving
approval from the board of directors of any enterprise seeking to enter into a
merger or amalgamation,
• or within thirty days of execution of any agreement or other document for the
acquisition of any enterprise or for acquiring the control of any enterprise.
•  However, no combination can come into effect unless 210 days have passed
from the date on which the Commission had received notice from the enterprise
 DISPOSAL OF NOTICE BY CCI

• Upon receiving the notice under Section 6(2), the Commission will examine the
notice and form a prima facie opinion on whether the proposed combination is
likely to cause an appreciable adverse effect on competition in the relevant
market.

• It will investigate the combination under the investigation procedures provided

in Section 29 of the Competition Act.
 PASSING OF ORDER BY CCI

• After investigation has taken place, if the Commission is of the opinion

that any combination does not, or is not likely to have an appreciable
adverse effect on competition, it shall by order approve the combination
in respect of which notice was given.

• On the other hand, after investigation, if the Commission is of the opinion

that the combination is likely to have an appreciable adverse effect on
competition in the relevant market, the Commission will direct that the
combination shall not come into effect and such combination will be
deemed void. 
 REFERENCES
• https://lexlife68840978.wordpress.com/2021/09/20/combination
s-and-their-regulation-under-indian-competition-law/
• https://indiankanoon.org/doc/632687/
• https://lexlife68840978.wordpress.com/2021/09/20/combination
s-and-their-regulation-under-indian-competition-law/
• https://www.slideshare.net/advocatekgupta/role-of-competition-c
ommission-of-india-in-governance-of-combination
THANK YOU
Any Questions?