India is witnessing a profound shift in its M&A regulatory landscape. In September 2025, the Competition Commission of India (CCI) rolled out updated FAQs clarifying the revamped merger-control regime, and the Ministry of Corporate Affairs (MCA) expanded the classes of entities eligible for fast-track merger/demerger under the Companies Act, 2013. Together, these reforms affect deal-structuring, jurisdictional assessments, pre-filing strategy and timelines. For corporates, private equity investors and legal advisors, staying ahead of these changes is critical to avoid compliance risks and extract strategic deal value.
In Depth Analysis
1. Key Regulatory Changes
A. Clarification FAQs by CCI (5 May 2025 FAQs rolled out; widely referenced in Sept 2025)
- The FAQs interpret the definition of “control” under the amended Competition Act to include veto rights, affirmative rights over budgets/business strategies and other “material influence”.
- Introduction of the Deal Value Threshold (DVT): combinations require notification where the value of transaction (VOT) exceeds INR 2,000 crore (~USD 230m) and target has “substantial business operations in India (SBOI)”.
- Fast-track (“Green Channel”) and streamlined review timelines: Phase I now 30 calendar days; stop-clock mechanisms apply.
B. MCA amendment of fast-track merger/demerger rules (4 Sept 2025)
- The Companies (Compromises, Arrangements & Amalgamations) Rules, 2016 were amended to widen eligibility of fast-track mergers to: Two or more unlisted companies (not section 8) meeting thresholds of outstanding loans/debentures/deposits.
- The Companies (Compromises, Arrangements & Amalgamations) Rules, 2016 were amended to widen eligibility of fast-track mergers to: Holding company & subsidiary companies (excluding where transferor is listed).
- The Companies (Compromises, Arrangements & Amalgamations) Rules, 2016 were amended to widen eligibility of fast-track mergers to: Two or more subsidiaries of same holding company (excluding transferor listed)
2. Why It Matters
- Historically, India’s merger-control regime triggered notification only when asset/turnover thresholds were crossed. The DVT adds a deal-value trigger, catching significant acquisitions of data/intangible-driven targets that previously flew under the radar.
- The expanded definition of “control” creates risk for minority-stake acquisitions where veto/affirmative rights exist — meaning more investments will need early review.
- Fast-track merger amendments open new structuring opportunities for groups (particularly unlisted or subsidiaries) to reorganise more efficiently — but legal advisers must assess eligibility carefully.
- For cross-border deals and private equity investments, pre-filing strategy, timing and regulatory alignment are now more important than ever.
3.Implications for Deal-makers & Stakeholders
A. Private Equity / Strategic Buyers
- Early assessment of whether a target’s “substantial business operations in India” condition is met — eg: data centres, user-base, revenue in India.
- Check whether the acquisition grants veto rights/affirmative rights which may confer “control” and hence notification obligation. The FAQs emphasise that rights beyond shareholding matter.
- Build in pre-filing consultations with CCI (on riskier or digital-economy deals) to manage timelines and conditions.
B. Corporate Groups / Private Companies
- The fast-track merger regime offers enhanced flexibility — groups could restructure unlisted companies or subsidiaries via faster procedures.
- But eligibility thresholds (loans/debentures/deposits criteria) must be carefully reviewed; not automatic for all entities.
- Pre-merger planning must incorporate both Companies Act compliance and competition-law risk.
C. Legal / Compliance Advisers
- Need to map deal timelines considering competition-review (suspensory obligation under Section 6), fast-track procedure, NCLT/tribunal approvals, filing strategy.
- Ensure diligence covers contractual rights that may amount to “control”, even if shareholding is modest.
- For deals crossing DVT, anticipate CCI conditions or remedies (for example, structural or behavioural undertakings).
4.Practical Challenges & Strategic Considerations
- Ambiguity around SBOI: What constitutes “substantial business operations in India” is still evolving — transaction parties must evaluate risk.
- Overlap with other regimes: For cross-border deals, overlap between FDI (via Foreign Exchange Management Act, 1999), tax and other sectoral regulators complicates planning.
- Integration risk during waiting period: The suspensory nature of competition filing means parties must avoid “gun-jumping” (premature exercise of control or implementation) or face penalties.
- Fast-track structural fit: While fast-track offers speed, missing eligibility or improper structuring may lead to NCLT rejection or complications.
- Deal value inflation: With deal value threshold in place, parties must meticulously calculate VOT (including non-cash consideration) to determine notifiability.
5. Strategic Recommendations
- Early threshold-check: For any M&A, map whether the transaction breaches asset/turnover thresholds or the new deal-value threshold; check eligibility for fast-track procedure.
- Control-rights audit: Review all governance and shareholder arrangements to spot rights that may trigger “control” for competition law purposes.
- Structured timetable: Integrate competition filing, fast-track merger timeline, shareholder/creditor approvals and regulatory filings in your project plan.
- Diligence on Indian operations: For targets with non-Indian parent or business, assess “substantial operations in India” via revenue, assets, workforce, logistics.
- Pre-filing consultations: For complex or digital-economy transactions, engage with CCI early to shape filing strategy and manage conditions.
- Awareness for unlisted groups: If your client is an unlisted group or subsidiary network, assess whether fast-track merger route may apply and plan restructure accordingly.
Impact Summary
- For PE funds / strategic acquirers: The new regime increases scrutiny, timelines and risk of conditions. Early planning is essential.
- For Indian corporate groups: Fast-track merger amendments create opportunities for efficient re-structuring, but eligibility needs review.
- For legal & deal-advisory teams: Combining competition-law and corporate-law considerations is no longer optional — they must be integrated into pre-deal strategy.
- For regulators & advisors: India’s merger-control regime is maturing — expect more pre-filing consultations, detailed rights review and faster but more stringent timelines.
India’s M&A framework has entered a new era with the deal value threshold, broader notion of control and widened fast track routes, deal makers must treat regulatory strategy as integral to transaction design not just a closing formal-step.