Sunday, July 31, 2011

First of it kind: Combination of Companies u/s 6 of the Competition Act, 2002 cleared by CCI in flat 18 days

In very first application under section 6 of the Competition Act, 2002, Competition Commission of India has approved Reliance Industries’ acquisition (combination – as per the act) of Bharti Group’s 74 per cent stake in its insurance joint venture with French insurer Axa within 18 days of the notice. Competition Act is enacted by the parliament in the year 2002 keeping in view the economic development of the country, for the establishment of a Commission to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India, and for matters connected therewith or incidental thereto.

In the operating part of the order, Competition Commission of India observed that in India as there are in total 49 Insurance companies, who are registered with IRDA, hence if the present acquisition (combination) is allowed, it is not likely to have an appreciable adverse effect on competition in the insurance market in India.

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