Acquisition, Merger and Amalgamation Compared

Section 5 covers three kinds of transaction, and although all three are combinations if the thresholds are met, they differ in form, in the entities that survive, in which figures the thresholds are applied to and in who must notify. An acquisition leaves both parties in existence and transfers shares, assets or control. A merger absorbs one enterprise into another. An amalgamation combines two or more into a new one. The distinction is drawn from company law and carried into the Act without redefinition.

1. The Three Forms

Basis	Acquisition	Merger	Amalgamation
What happens	One person acquires shares, voting rights, assets or control of an enterprise	One enterprise is absorbed into another, which continues	Two or more enterprises combine into a new entity
Entities surviving	Both; the target continues as a separate person	The transferee only	Neither in its old form; a new enterprise emerges
Statutory basis	Section 2(a) and Section 5(a) and (b)	Section 5(c)	Section 5(c)
Thresholds applied to	The acquirer and the target taken together, and the groups to which they will belong	The enterprise remaining after the merger	The enterprise created as a result
Who notifies	The acquirer	The parties jointly	The parties jointly
Approvals elsewhere	Contractual and regulatory consents; a scheme is not usually required	A scheme of arrangement sanctioned under the company law	The same

2. Acquisition in Detail

Section 2(a) defines acquisition as directly or indirectly acquiring or agreeing to acquire shares, voting rights or assets of any enterprise, or control over management or control over assets of any enterprise. Four points follow.

It includes an agreement to acquire, so the obligation to notify arises on the execution of the transaction documents rather than on completion, which is what makes the regime suspensory.
It covers indirect acquisition, so the purchase of a foreign parent that holds an Indian subsidiary is an acquisition of that subsidiary and is assessed on the Indian figures attributable to it.
Control is one of the things acquired. After the amendment of 2023 control means the ability to exercise material influence over management, affairs or strategic commercial decisions, which brings many minority acquisitions within the section.
Section 5(b) is a separate limb. Where a person who already controls an enterprise in a particular business acquires control of another enterprise engaged in an identical, substitutable or similar business, the thresholds are applied to the two enterprises taken together.

3. Merger and Amalgamation

Section 5(c) covers a merger or amalgamation between or amongst enterprises, and applies the thresholds to the enterprise remaining after the merger or created as a result of the amalgamation, and to the group to which it will belong. In company law the distinction is that in a merger the transferor is dissolved and its undertaking vests in the transferee, while in an amalgamation two or more companies combine and a new company takes over their undertakings; the Act uses both expressions and does not define either, so the company law meaning applies.

⚠ Why the form matters less than it appears

For competition purposes the question is always the same: does the transaction bring under common control businesses that were previously independent, and what does that do to competition in a relevant market in India? A transaction structured as an acquisition of shares, as a business transfer, as a merger under a scheme or as a joint venture receiving assets from both parents may produce identical effects, and the Commission looks at substance. That is why interconnected steps are treated as a single composite combination, and why parties cannot escape notification by dividing a transaction into parts each of which falls below a threshold.

4. Procedural Consequences

Who files. In an acquisition the obligation falls on the acquirer; in a merger or amalgamation the parties file jointly.
Trigger. The obligation arises on execution of the binding document, board approval of the scheme, or the equivalent event, and the transaction cannot be consummated until approval or the expiry of the statutory period.
Threshold computation. The figures differ according to the form, as the table shows, and the group figures must also be tested.
Exemptions. The categories in the Competition (Criteria for Exemption of Combinations) Rules, 2024 apply differently to each form, several of them being confined to acquisitions of shares within stated bands.
Interaction with company law. A merger or amalgamation also requires sanction under the company law, and where the transaction forms part of a resolution plan under the Insolvency and Bankruptcy Code, 2016 the approval of the Commission must precede the approval of the plan by the committee of creditors.

5. Related Topics and Provisions

Topic or provision	Connection
Regulation of Combinations: Sections 5 and 6	The regime in full
The Deal Value Threshold	The additional gateway for high-value transactions
Important Definitions under Section 2	Acquisition, control and group
The Criteria for Exemption of Combinations Rules, 2024	Which exemptions apply to which form
Sections 2(a), 5, 6 and 43A, Competition Act, 2002	Definition, thresholds, notification and gun jumping