Advisory Board

  • Cai Hongbin
  • Peking University Guanghua School of Management
  • Peter Clarke
  • Barry Diller
  • IAC/InterActiveCorp
  • Fu Chengyu
  • China National Petrochemical Corporation (Sinopec Group)
  • Richard J. Gnodde
  • Goldman Sachs International
  • Lodewijk Hijmans van den Bergh
  • De Brauw Blackstone Westbroek N.V.
  • Jiang Jianqing
  • Industrial and Commercial Bank of China, Ltd. (ICBC)
  • Handel Lee
  • King & Wood Mallesons
  • Richard Li
  • PCCW Limited
  • Pacific Century Group
  • Liew Mun Leong
  • CapitaLand Limited
  • Martin Lipton
  • New York University
  • Wachtell, Lipton, Rosen & Katz
  • Liu Mingkang
  • China Banking Regulatory Commission (CBRC)
  • Dinesh C. Paliwal
  • Harman International Industries
  • Leon Pasternak
  • Bank of America Merrill Lynch
  • Tim Payne
  • Brunswick Group
  • Joseph R. Perella
  • Perella Weinberg Partners
  • Baron David de Rothschild
  • N M Rothschild & Sons Limited
  • Dilhan Pillay Sandrasegara
  • Temasek Holdings
  • Shao Ning
  • State-owned Assets Supervision and Administration Commission of the State Council of China (SASAC)
  • John W. Snow
  • Cerberus Capital Management, L.P.
  • Former U.S. Secretary of Treasury
  • Bharat Vasani
  • Tata Group
  • Wang Junfeng
  • King & Wood Mallesons
  • Wang Kejin
  • China Banking Regulatory Commission (CBRC)
  • Wei Jiafu
  • China Ocean Shipping Group Company (COSCO)
  • Yang Chao
  • China Life Insurance Co. Ltd.
  • Zhu Min
  • International Monetary Fund

Legal Roundtable

  • Dimitry Afanasiev
  • Egorov Puginsky Afanasiev and Partners (Moscow)
  • William T. Allen
  • NYU Stern School of Business
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Johan Aalto
  • Hannes Snellman Attorneys Ltd (Finland)
  • Nigel P. G. Boardman
  • Slaughter and May (London)
  • Willem J.L. Calkoen
  • NautaDutilh N.V. (Rotterdam)
  • Peter Callens
  • Loyens & Loeff (Brussels)
  • Bertrand Cardi
  • Darrois Villey Maillot & Brochier (Paris)
  • Santiago Carregal
  • Marval, O’Farrell & Mairal (Buenos Aires)
  • Martín Carrizosa
  • Philippi Prietocarrizosa & Uría (Bogotá)
  • Carlos G. Cordero G.
  • Aleman, Cordero, Galindo & Lee (Panama)
  • Ewen Crouch
  • Allens (Sydney)
  • Adam O. Emmerich
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Rachel Eng
  • WongPartnership (Singapore)
  • Sergio Erede
  • BonelliErede (Milan)
  • Kenichi Fujinawa
  • Nagashima Ohno & Tsunematsu (Tokyo)
  • Manuel Galicia Romero
  • Galicia Abogados (Mexico City)
  • Danny Gilbert
  • Gilbert + Tobin (Sydney)
  • Vladimíra Glatzová
  • Glatzová & Co. (Prague)
  • Juan Miguel Goenechea
  • Uría Menéndez (Madrid)
  • Andrey A. Goltsblat
  • Goltsblat BLP (Moscow)
  • Juan Francisco Gutiérrez I.
  • Philippi Prietocarrizosa & Uría (Santiago)
  • Fang He
  • Jun He Law Offices (Beijing)
  • Christian Herbst
  • Schönherr (Vienna)
  • Lodewijk Hijmans van den Bergh
  • Royal Ahold (Amsterdam)
  • Hein Hooghoudt
  • NautaDutilh N.V. (Amsterdam)
  • Sameer Huda
  • Hadef & Partners (Dubai)
  • Masakazu Iwakura
  • Nishimura & Asahi (Tokyo)
  • Christof Jäckle
  • Hengeler Mueller (Frankfurt)
  • Michael Mervyn Katz
  • Edward Nathan Sonnenbergs (Johannesburg)
  • Handel Lee
  • King & Wood Mallesons (Beijing)
  • Martin Lipton
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Alain Maillot
  • Darrois Villey Maillot Brochier (Paris)
  • Antônio Corrêa Meyer
  • Machado, Meyer, Sendacz e Opice (São Paulo)
  • Sergio Michelsen Jaramillo
  • Brigard & Urrutia (Bogotá)
  • Zia Mody
  • AZB & Partners (Mumbai)
  • Christopher Murray
  • Osler (Toronto)
  • Francisco Antunes Maciel Müssnich
  • Barbosa, Müssnich & Aragão (Rio de Janeiro)
  • I. Berl Nadler
  • Davies Ward Phillips & Vineberg LLP (Toronto)
  • Umberto Nicodano
  • BonelliErede (Milan)
  • Brian O'Gorman
  • Arthur Cox (Dublin)
  • Robin Panovka
  • Wachtell, Lipton, Rosen & Katz (New York)
  • Sang-Yeol Park
  • Park & Partners (Seoul)
  • José Antonio Payet Puccio
  • Payet Rey Cauvi (Lima)
  • Kees Peijster
  • COFRA Holding AG (Zug)
  • Juan Martín Perrotto
  • Uría & Menéndez (Madrid/Beijing)
  • Philip Podzebenko
  • Herbert Smith Freehills (Sydney)
  • Geert Potjewijd
  • De Brauw Blackstone Westbroek (Amsterdam/Beijing)
  • Qi Adam Li
  • Jun He Law Offices (Shanghai)
  • Biörn Riese
  • Mannheimer Swartling (Stockholm)
  • Mark Rigotti
  • Herbert Smith Freehills (Sydney)
  • Rafael Robles Miaja
  • Robles Miaja (Mexico City)
  • Alberto Saravalle
  • BonelliErede (Milan)
  • Maximilian Schiessl
  • Hengeler Mueller (Düsseldorf)
  • Cyril S. Shroff
  • Cyril Amarchand Mangaldas (Mumbai)
  • Shardul S. Shroff
  • Shardul Amarchand Mangaldas & Co.(New Delhi)
  • Klaus Søgaard
  • Gorrissen Federspiel (Denmark)
  • Ezekiel Solomon
  • Allens (Sydney)
  • Emanuel P. Strehle
  • Hengeler Mueller (Munich)
  • David E. Tadmor
  • Tadmor & Co. (Tel Aviv)
  • Kevin J. Thomson
  • Barrick Gold Corporation (Toronto)
  • Yu Wakae
  • Nagashima Ohno & Tsunematsu (Tokyo)
  • Wang Junfeng
  • King & Wood Mallesons (Beijing)
  • Tomasz Wardynski
  • Wardynski & Partners (Warsaw)
  • Rolf Watter
  • Bär & Karrer AG (Zürich)
  • Xiao Wei
  • Jun He Law Offices (Beijing)
  • Xu Ping
  • King & Wood Mallesons (Beijing)
  • Shuji Yanase
  • OK Corporation (Tokyo)
  • Alvin Yeo
  • WongPartnership LLP (Singapore)

Founding Directors

  • William T. Allen
  • NYU Stern School of Business
  • Wachtell, Lipton, Rosen & Katz
  • Nigel P.G. Boardman
  • Slaughter and May
  • Cai Hongbin
  • Peking University Guanghua School of Management
  • Adam O. Emmerich
  • Wachtell, Lipton, Rosen & Katz
  • Robin Panovka
  • Wachtell, Lipton, Rosen & Katz
  • Peter Williamson
  • Cambridge Judge Business School
  • Franny Yao
  • Ernst & Young

Monthly Archives: February 2015

INDIAN UPDATE – Phase II Combination Investigations by the CCI

Editors’ Note:  This is contributed by Zia Mody, founding partner of AZB & Partners and a member of XBMA’s Legal Roundtable.  Ms. Mody has led many of India’s most significant corporate transactions, been recognized by Business Today as one of the Most Powerful Women in Indian Business and received the Economic Times Award for Corporate Excellence as Businesswoman of the Year.

Executive Summary: While most merger transactions have been passed by the Competition Commission of India (“CCI”) without conducting a detailed investigation, the CCI has escalated recent combinations to such greater review.  This article examines the procedure of the CCI in relation to so-called Phase II inquiries in proposed combinations and highlights some of the teething issues that may be associated with such inquiries.

Main Article: 

Since the operationalization of the merger control rules in June 2011, the Competition Commission of India (‘CCI’) has reviewed close to 200 transactions (referred to as ‘combinations’) without conducting a detailed investigation, or Phase II inquiry, of a proposed combination. By and large CCI has approved most proposed combinations within 4 to 8 weeks of the receipt of no­tification by the parties. Notably, CCI took significantly longer – 168 days – to review and issue an approval order in respect of Etihad’s proposal to acquire a 24% stake in Jet1. Nonetheless, CCI did not see the need to subject a proposed combination to the detailed scrutiny of a Phase II inquiry.

In the last three months though, CCI has in quick succession, escalated two proposed com­binations to Phase II review. In September 2014, CCI formally announced the opening of a Phase II inquiry of the proposed combination between Sun Pharmaceutical Industries Limited (‘Sun’) and Ranbaxy Laboratories Limited (‘Ranbaxy’) (‘Sun-Ranbaxy Transaction’). On December 5, 2014 CCI approved the Sun-Ranbaxy Transaction, ending the first ever Phase II review initi­ated by it. CCI followed this up with commencing a Phase II inquiry of the combination between Holcim Limited (‘Holcim’) and Lafarge S.A. (‘Lafarge’) (‘Holcim-Lafarge Transaction’) in No­vember 2014. Undoubtedly, CCI has done an excellent job in streamlining the merger control regulations and approving transactions well within the 210 days statutory outer limit prescribed under the Competition Act, 2002 (‘Competition Act’) for approving transactions, however, the procedure on Phase II inquiries though remains a little unclear.

In light of CCI concurrently conducting 2 detailed Phase II inquiries, this article seeks to provide an overview of the procedure followed by CCI in Phase II inquiries and highlights some of the teething issues that may be associated with Phase II inquiries.

General CCI processes regarding combination inquiries

As a general rule, CCI is required to issue a prima facie opinion on whether a proposed combina­tion causes or is likely to cause an appreciable adverse effect on competition (AAEC) in India within 30 calendar days of receipt of a notice. The time taken by the parties to the combination to respond to CCI’s requests for additional information is not counted towards the 30 day period. If CCI reaches the prima facie opinion that a proposed combination does not (or is not likely to) cause an AAEC in India, it issues a formal order approving the proposed combination. Otherwise, CCI issues a notice under Section 29 of the Competition Act (‘Section 29 Notice’) seeking the parties’ view on why a detailed investigation to examine the competitive effects of the proposed combination should not be carried out. If the relevant parties successfully address CCI’s con­cerns, including by way of offering structural remedies or behavioral commitments, CCI does not initiate a formal inquiry and approves the transaction. Conversely, if the CCI is not satisfied by the responses offered by relevant parties, then CCI initiates a formal Phase II inquiry.

The Phase II process

Upon receipt of a response to the Section 29 Notice, CCI may, at its discretion, request its inves­tigative arm, the Director General (‘DG’), to conduct an investigation and submit a report in respect of the proposed combination. Simultaneously and within 7 days of receipt of the report from the DG, or the parties’ response to the Section 29 Notice, CCI is required to direct the par­ties to publish the details of the proposed combination (‘Publication Direction’), which must be complied with, within 10 working days of such a direction. The publication entails providing de­tails of the proposed combination in the format prescribed under the merger control regulations (known as a Form IV). The parties are required to upload a completed Form IV on their respec­tive websites and also publish it in 2 national dailies. CCI also posts the Form IV on its website within 10 days of issuance of the Publication Direction (‘Public Disclosure’).

Pursuant to the Public Disclosure, CCI may invite written objections to the combination from any person affected or likely to be affected due to the proposed combination coming into effect (‘Public Objections’). The Public Objections must be filed within 15 days of the Public Disclo­sure. Subsequent to the receipt of Public Objections, CCI must within 15 working days seek addi­tional information, if it wishes to, from the parties. Again, the parties are offered a 15 day window to submit such additional information to CCI.

After the receipt of additional information requested by CCI from the parties, CCI is required to issue an order either (i) approving the transaction, (ii) disallowing the transaction, or (iii) proposing modifications to the transaction (‘Remedies’). If CCI proposes Remedies, the parties have the flexibility to propose modifications to CCI’s proposed Remedies. CCI may either accept the modification proposed by the parties or compel the parties to accept the Remedies initially identified by it if CCI is not satisfied with the parties’ proposed modification.

The parties are required to carry out the modifications within such time as CCI may prescribe and upon completion of the modifications, the parties need to file a compliance report with CCI.

Indian Experience with Phase II investigations

On December 5, 2014 CCI approved the Sun-Ranbaxy Transaction but ordered the divestment of all tamsulosin and tolterodine products of Sun and six other products marketed by Ranbaxy. The combined market share of Sun and Ranbaxy for the products to be divested are in the range of 90-95%, CCI. The high combined market shares in these eight products appear to be the key reason for the CCI’s decision to require their divestiture.

CCI has stated that the transaction shall not be given effect until the divestments have been en­tered made, in accordance with the orders of CCI.

The Holcim-Lafarge Transaction is still at the Public Disclosure stage. While CCI did not escalate its inquiry to Phase II investigation, on at least on 2 occasions, CCI has required parties to trans­actions in the pharmaceutical sector to modify the terms of their non-compete agreements.

The views expressed herein are solely those of the author and have not been endorsed, confirmed, or approved by XBMA or any of the editors of XBMA Forum, nor by XBMA’s founders, members, contributors, academic partners, advisory board members, or others. No inference to the contrary should be drawn.

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