AZB acts on first Green Channel combination received by CCI as Sachin Bansal’s BAC looks to acquire Essel Mutual Fund

AZB acts on first Green Channel combination received by CCI as Sachin Bansal’s BAC looks to acquire Essel Mutual Fund

Aditya AK

The Competition Commission of India recently received its first Green Channel combination filing, as Sachin Bansal-owned BAC Acquisitions Private Limited (BACQ) plans to acquire Essel Mutual Fund.

The Green Channel is a means to enable quick regulatory approvals for mergers and acquisitions that do not have any appreciable adverse effects on competition. It was introduced this year through an August 2019 amendment to the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations.

The CCI has now received its first filing of the sort in BACQ’s proposed acquisition of Essel Mutual Fund. A statement issued by the CCI in this regard notes,

“The Proposed Combination raises no risk of any adverse effect on competition as per Section 6(1) of the Competition Act, and is also being submitted under the ‘green channel’ route as the Parties do not have any: (i) Horizontal Overlaps, (ii) Vertical Overlaps, or (iii) Complementary businesses.”

BACQ is a new addition to the Sachin Bansal Group and is involved in the business of building technology and providing services through information technology. Essel MF is a mutual fund registered under the SEBI (Mutual Funds) Regulations, 1996.

The transaction was facilitated by a team from AZB & Partners headed by Partner Aditi Gopalakrishnan, along with Associates Gaurav Bansal, Shashank Sharma, Nripi Jolly and Rahul Shukla.

The Competition Law Review Committee (CLRC) constituted last year had initially made the suggestion to introduce the Green Channel route of approval.

This Committee, which included the likes of Pallavi Shroff, Zia Mody, Haigreve Khaitan and Somasekhar Sundaresan, had submitted its report on reform in the Competition Law in August this year. The report noted that since 2011, the CCI has ordered modifications in only 2.6% of combinations and is yet to reject any combination on the ground that it is likely to cause an appreciable adverse effect on competition.

The CLRC further noted that merger control increases transaction costs and deal timelines. Accordingly, the CLRC recommended putting in place the Green Channel as an automatic route for approving mergers, while maintaining the CCI’s oversight.

Based on the CLRC’s suggestion, a new Regulation 5A was introduced to the Combination Regulations. As per this new provision, a proposed combination shall be deemed to be approved upon filing of a notice and acknowledgement thereof.

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