The combinations including M&A and amalgamations involving Central Public Sector Enterprises (CPSEs) operating in the oil and gas sector have been exempted from seeking the nod of the CCI for five years from now. As per the Competition Act provisions, combinations over and above a certain threshold need to get the competition watchdog CCI’s nod.
According to a notification by the Ministry of Corporate Affairs (MCA) dated November 22, “The Central Government in the public interest hereby exempts all cases of combinations involving the CPSEs operating in the Oil and Gas Sectors under the Petroleum Act and the rules made thereunder or under the Oilfields (Regulation and Development) Act, 1948 ... and the rules made thereunder, along with their wholly or partly owned subsidiaries operating in the Oil and Gas Sectors, from the application of the provisions of sections 5 and 6 of the (Competition) Act (pertaining to combination and their regulation), for a period of five years from the date of publication of this notification in the Official Gazette.”
The first such merger in the segment has already received the go-ahead from the Cabinet Committee on Economic Affairs (CCEA). In July, the CCEA approved the sale of the government’s 51.11% stake in oil refiner HPCL to the country’s largest oil producer ONGC (also a state-run entity). The Government officials had stated recently that they expect the HPCL-ONGC merger to be completed by the end of the current year. Reports also claim that talks have already begun on another big bang merger in the segment (Indian Oil Corporation Ltd with Oil India Ltd).
The MCA had earlier in August exempted all cases of reconstitution, transfer of the whole or any part thereof and amalgamation of nationalized banks from the application of provisions of Sections 5 and 6 of the Competition Act, 2002 for a period of ten years from the date of publication of the notification.
For more information, please see http://www.egazette.nic.in/WriteReadData/2017/180364.pdf