In a significant move reshaping the landscape of mergers and acquisitions in India, the Ministry of Corporate Affairs (MCA) has rolled out the much-anticipated deal value threshold (DVT) provision under the Competition (Amendment) Act, 2023. This new regulation, effective September 10, raises the bar for regulatory scrutiny, particularly for high-value transactions in the digital sector.
Under the updated guidelines, any merger or acquisition where the deal surpasses ₹2,000 crore will now face mandatory review by the Competition Commission of India (CCI), provided the target company has significant business operations in India. This move addresses a gap in the traditional reliance on asset or turnover-based thresholds, especially given the complexities of digital markets where value can often exceed tangible assets.
Initially proposed to cover both the acquiring and target companies, the DVT provision was narrowed after parliamentary feedback to focus solely on the target entity’s Indian operations. The refined regulation aims to keep large, potentially anti-competitive deals in check while easing the burden on smaller transactions.
In addition to the DVT rule, new exemptions were introduced under the Competition (Minimum Value of Assets or Turnover) Rules. Companies with assets below ₹450 crore and a turnover of less than ₹1,250 crore can now bypass the regulatory hurdles, allowing smaller deals to proceed without CCI approval.
While the deal value threshold is now active, further guidance from the CCI is expected soon, offering more detailed instructions on enforcement and compliance. This regulatory shift marks a new era for India’s M&A environment, balancing oversight with operational efficiency.
