Clarity on availability of the ‘Green Channel’ route for merger control filings



The Competition Commission of India (CCI) had introduced the ‘green channel’ route for merger control filings in 2019, under which combinations that triggered an obligation to notify the CCI under the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations), but which did not entail any overlaps between the target, the acquirer and their respective affiliates / group entities, would be deemed to be approved upon notification to the CCI. Accordingly, combinations that are notified under the green channel can be consummated immediately after notification, without waiting for assessment by and formal approval order from the CCI.

The green channel has proven to be popular since its inception, with over a fifth of the notices given to the CCI under the Combination Regulation during this period having been under the green channel. Though there are no doubts about the availability of the green channel route in circumstances where there are no potential or actual overlaps, there have been a few instances where green channel notices were made disclosing certain overlaps.[1] Given that the CCI does not seem to have challenged the usage of the green channel in such cases, this created an apprehension that the CCI may be amenable to extending the benefit of the green channel even where a combination led to overlaps (provided such overlaps were minor), though the question that then arose was the extent to which any overlaps would be considered immaterial enough for the combination to still be eligible for the green channel.

A recent CCI order with respect to a green channel notice submitted jointly by Platinum Owl C 2018 RSC Limited (acting as trustee of Platinum Jasmine A 2018 Trust) (Platinum) and TPG Upswing Ltd. (TPG Upswing, and together with Platinum, the Acquirers)[2] sheds some light as to the CCI’s views on the green channel, indicating that notwithstanding notices having been made under the green channel in the past disclosing minor overlaps, going forward it may be prudent to avoid the green channel in the event there are any overlaps, regardless of materiality.


The Acquirers had on 20 December 2022 submitted a notice under the green channel of a proposed acquisition by the Acquirers, through an entity called the Upswing Trust, of 5% shareholding in UPL Sustainable Agri Solutions Limited (UPL SAS). As a condition precedent to this acquisition, certain steps were to be taken towards internal reorganisation of the business, including UPL SAS becoming a direct subsidiary of UPL Limited, certain wholly owned subsidiaries of UPL Limited becoming wholly owned subsidiaries of UPL SAS, and transfer of certain businesses, including the crop protection business (except manufacturing), by UPL Limited to UPL SAS and its subsidiary. The CCI’s order notes that the acquisition had been completed by 17 February 2023.

Subsequently, the CCI issued a show cause notice to the Acquirers, noting that the green channel notice had disclosed that the Upswing Trust holds a 22.2% stake in UPL Corporation Ltd., whose subsidiary, Arysta LifeScience India Limited (Arysta), is engaged in the business of manufacturing and distribution of formulated crop protection products (FCPPs), which appeared to overlap with the activities of UPL SAS and its subsidiary. The Acquirers were therefore asked to show cause inter alia why their notice should not be found void ab initio, for having been made under the green channel despite the existence of overlaps.


Among the submissions made by the Acquirers in response to the CCI’s show cause notice, it was contended that since Arysta and UPL SAS belong to the same corporate group, i.e., under UPL Limited, there was no need to map overlaps between entities belonging to the same group. Further, it was contended that sales of FCPPs made by Arysta to UPL SAS were in the nature of captive sales within the same group and therefore did not impact the competitive landscape of the relevant market, and that Arysta and UPL SAS were treated as the same brand / entity both within the group and externally by third parties. The Acquirers also noted how there are precedents under the regular (i.e., non-green channel) route where the CCI has not mapped overlaps between businesses that are discontinued since such discontinuance would eliminate the overlap and any consequent effect on the market, which should be considered relevant in the present situation since Arysta had independently taken a decision to discontinue any such third party sales, which in any event formed a miniscule portion of its overall sales, undertaken only because of certain regulatory reasons or surplus capacity. Finally, the Acquirers referred to prior approvals given under the green channel by the CCI despite the presence of certain minor overlaps.

However, the CCI did not accept any of these submissions, observing that factors such as the overlapping entities belonging to the same group, overlapping products being perceived to be the same, sales to third parties being inconsequential etc. may at most be considered in a detailed competition assessment under the regular route, but not in the determination of eligibility for the green channel route. The CCI did not distinguish the present notice from other notices referred to by the Acquirers which were made under the green channel despite the existence of minor overlaps, but only observed that the eligibility criteria for the green channel are objective and specific, i.e., that there should be no overlaps.


The CCI found the Acquirers’ notice and deemed approval thereof to be void ab initio and the declarations made by the Acquirers in the notice about being eligible for the green channel to be false – penalties under Sections 43A and 44 of the Competition Act, 2002 were therefore levied on the Acquirers. In determining the penalties, the CCI appeared to show some leniency, with the penalty of INR 50,00,000 levied under Section 44 being the minimum penalty prescribed and a token penalty of INR 5,00,000 being levied under Section 43A (which allows a penalty up to 1% of the assets or turnover of the parties involved). Nevertheless, the CCI has also clarified that the penalty imposed was determined considering the background and facts in totality of the present case, but that going forward any incorrect green channel declarations would be dealt with seriously.

Though the CCI did not delve into the circumstances under which notices have previously been accepted under the green channel despite the existence of minor overlaps, by way of this order it seems to have shut the door on this possibility. By reiterating that the eligibility criteria for the green channel are objective and specific, it seems clear that the CCI intends for the green channel to only be availed where there no overlaps, and that even if any overlaps are non-material the combination would need to be subjected to a detailed competition assessment.

Arguably, there being prior instances of transactions having been approved under the green channel route despite the existence of overlaps had led to some uncertainty as to its application, by creating an apprehension that the route may be used even if there are some minor overlaps, but without any indication as to how minor these overlaps should be to still be eligible for the green channel. Though parties to a combination have always had the option to discuss eligibility under the green channel for specific transactions with the CCI in a non-binding pre-filing consultation, the observations made in this order are welcome, by clearly outlining the CCI’s views on the eligibility criteria for the green channel.

[1] See notices filed by International Finance Corporation (having Combination Registration No. C-2021/02/812) and BW Investment Ltd. (having Combination Registration No. C-2022/10/975).

[2] Combination Registration No. C-2022/12/995.


This material is for general information only and is not intended to provide legal advice. This material is distributed with the understanding that the authors are not rendering legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, assume no liability whatsoever in connection with its use.




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