Merger can be termed as a marriage between two or more business enterprises for achieving better results. Usually a merger is seen as an amalgamation of two or more business enterprises for better and efficient functioning. With the increase in global competition the market has become dynamic in nature and the industries cannot survive in the market only by being efficient in their approach. Now the industries to survive in this global market have to carry out large scale of operations along being efficient. This becomes one of the important reasons for merger to take place so that the companies can attain economies of scale by merging up. India has always faced stiff competition from China even in India’s domestic territory as China has always performed better with large scale of operations. Therefore Merger are generally seen for different business and commercial reasons, few of those could be, to achieve economies of scale and scope, to expand business capacity, to be operative in different markets, to produce at lowest marginal cost and various others.
Merger is a very common practise in India and mergers are not prohibited till they do not harm the spirit of healthy market. A merger would come under the scanner of Competition Commission of India if such merger would have or an appreciable effect on the market. The scanner of CCI will also be attracted in such mergers where there is a possibility that there can be an appreciable adverse effect on the competition due to such merger. Under Indian Competition Act 2002 there is no definition of AAEC but there are clear statutory provisions under the act which states that in which conditions it is possible to say that there has been an Appreciable Adverse Effect on The Competition.
Cite this article:
Parth Chandra. Regulation of Merger under Indian Competition Act 2002. Int. J. Rev. & Res. Social Sci. 2(1): Jan. – Mar. 2014; Page 51-54.