Merger control: when the filing question changes the deal structure

Transaction teams tend to treat merger-control analysis as a workstream that runs alongside documentation. In transactions close to the notifiability thresholds, that sequencing is inverted: the answer to the filing question determines what can be signed, when closing can occur, and what interim covenants are permissible.

Three consequences of a late assessment

• Gun-jumping risk in interim covenants drafted before the filing analysis was done.

• A closing timetable that the parties have already represented to lenders and employees.

• Structural alternatives - staged acquisition, minority-first structures - foreclosed by the documents already agreed.

The deal value threshold changes the calculus

Since September 2024, the notification requirement no longer turns only on the assets and turnover of the parties. Where a transaction's value exceeds ₹2,000 crore and the target has substantial business operations in India, CCI approval is required irrespective of how small the target's balance sheet is. The test was built for the acquisition profile common to technology and platform deals - a target with limited assets or turnover but a material user base, gross merchandise value or data footprint in India - and it is increasingly the test that actually binds. Treating it as a subset of the traditional thresholds, rather than an independent one, is the most common reason a filing analysis starts too late.

The early questions

Assess, at term-sheet stage: whether the thresholds are met on the relevant tests - asset, turnover or deal value - whether any exemption is genuinely available on the facts, and whether the parties overlap in any market in a way that invites substantive review rather than a routine one.