ABC Ltd. was incorporated on May 12, 1986, under the Indian Companies Act, having its registered office at Mumbai, Maharashtra. The present capital structure of the petitioner company is as follows: ₹ 1,000 crore Authori

As per Section 5 of the Competition Act, 2002, Combination is defined as (i) acquisition of control, shares, voting rights or assets; or (ii) acquiring of control by a person over an enterprise when such person has already direct or indirect control over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or provision of a similar or identical or substitutable service; or (iii) exceeding financial thresholds stated in it which are required to be mandatorily approved by the Competition Commission of India (CCI). Regulation 9 of the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 states that it is the responsibility of the acquirer to notify an acquisition or a hostile takeover. In case of a merger or an amalgamation, a joint notice is to be filed by the merging or amalgamating parties. In case of formation of a joint venture, the responsibility to file a notice would lie with all the parties forming the joint venture. Thresholds For Filing Notice: Assets Turnover Enterprise Level India > ₹2000 crore OR >₹6000 crore Worldwide with > US$ 1 bn. With at least ₹1000 crore in India > US$ 3 bn. With at least ₹3000 crore in India OR Assets Turnover Group Level India >₹8000 crore OR >₹24000 crore Worldwide with > US$ 4 bn With at least ₹1000 crore in India >US$ 12 bn. With at least ₹3000 crore in India Item 1 of Schedule 1 along with Explanation read with Regulation 4 of the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 states that where acquisition of voting rights or shares under section 5 shall be treated as Combination to be reported under section 6 if the acquirer becomes a member on the Board of Directors of the enterprise and exercise a right to nominate or control Board of Directors of the enterprise though acquisition is less than 25% of shares or voting rights of an enterprise. Acquisition of less than 10% shall be treated solely as an investment. In the present case, XYZ Limited, the acquirer, has to notify the substantial acquisition or hostile takeover under section 6 of the Act to CCI because as a result of such acquisition, Combination is meeting threshold of combined assets (2700 cr+1500 cr=4400 cr) and it holds the total shares or voting rights of ABC Limited between 10 to 25% and got two directors in the Board of Directors of ABC Limited. Regulation 5(3)(a) of the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 states that the parties to the combination may, at their option, give notice in Form II, as specified in schedule II to these regulations, preferably in the instances where the parties to the combination are engaged in production, supply, distribution, storage, sale or trade of similar or identical or substitutable goods or provision of similar or identical or substitutable services and the combined market share of the parties to the combination after such combination is more than fifteen percent (15%) in the relevant market. Regulation 5(9) of the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 provides that where in a series of steps or individual transactions that are related to each other, assets are being transferred to an enterprise for the purpose of such enterprise entering into an agreement relating to an acquisition or merger or amalgamation with another person or enterprise, for the purpose of section 5 of the Act, the value of assets and turnover of the enterprise whose assets are being transferred shall also be attributed to the value of assets and turnover of the enterprise to which the assets are being transferred. In the present case, XYZ Limited, the acquirer, has to notify the substantial acquisition or hostile takeover to CCI because as a result of such acquisition, it holds not less than 10% the total shares or voting rights of ABC Limited and got two directors in the Board of Directors of ABC Limited. As it is meeting threshold criterion for demerger of TRM Limited from assets crossing ₹2000 crore, further acquisition of 51% shareholding by XYZ Limited in TRM Limited is part of the same transaction and market share of product "O" for TRM Limited is crossing 15%. A notice of combination shall be filed by the parties with CCI under section 5 and the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011.