The Supreme Court’s recent ruling in the AGI Greenpac-Hindusthan National Glass acquisition case is set to have far-reaching implications for India’s mergers and acquisitions (M&A) landscape, raising concerns over potential delays, regulatory rigidity, and uncertainty in deal-making. The judgment, which mandates prior approval from the Competition Commission of India (CCI) before creditors clear a resolution plan under the Insolvency and Bankruptcy Code (IBC), is expected to add significant time to the approval process, affecting business transactions and investor confidence, sources said.
CCI’s Swift Clearance Process at Risk of Disruption
The ruling effectively nullified the resolution plan for Hindustan National Glass & Industries Ltd. on the grounds that AGI Greenpac had not obtained prior CCI approval before its plan was approved by creditors. This decision underscores the court’s interpretation that regulatory clearances must be secured before lenders give their nod, reinforcing the procedural requirements under the competition law framework. However, this shift in approach is likely to introduce bottlenecks in the corporate resolution process, particularly in insolvency-driven transactions where speed is critical.
The CCI has so far been proactive in ensuring a swift and efficient approval process for M&A deals, maintaining a balance between regulatory oversight and business expediency. Under the current Chairperson Ravneet Kaur, the average time taken for clearance of merger and acquisition deals has been significantly reduced to just 16 working days, reflecting a concerted effort to enhance the ease of doing business in India. This expedited review process has been instrumental in facilitating deal closures, attracting investment, and ensuring that businesses do not face unnecessary delays in executing strategic transactions. However, with the Supreme Court’s latest ruling mandating a more rigid and time-intensive investigation process under Section 29, industry experts fear that such efficiency gains could be reversed, leading to longer approval timelines and increased regulatory uncertainty.
Long-Standing Regulatory Practice Overturned
Industry experts warn that this interpretation could disrupt established practices in merger approvals, increasing regulatory scrutiny and procedural delays. The concern stems from the requirement that once the CCI issues a show cause notice under Section 29(1) of the Competition Act, the entire process of investigation—including stakeholder consultations, impact assessments, and potential modifications—must be followed before a final decision is reached. Previously, the CCI could to approve combinations based on voluntary modifications from the transacting parties without undergoing the full-fledged investigative process.
The Supreme Court, by discarding the long-standing practicefollowed by the competition regulator since 2011 when the merger control regime became operational, has effectively ruled that compliance with the steps under Section 29 is mandatory, and thereby leaving no room for the discretionary approach the competition regulator had followed so far. By insisting on a strict interpretation of the statutory provision, the judgment effectively overrides the regulator’s ability to approve combinations based on voluntary modifications before completing the entire investigation process. This marks a significant departure from how the CCI has handled such cases over the years and is expected to slow down transaction approvals by making procedural compliance more rigid and time-intensive.
Foreign Investment and Business Confidence at Stake
Legal and corporate circles believe this development could negatively impact India’s attractiveness as a global investment hub, as deal closures become increasingly unpredictable. The added procedural burden may deter foreign investors who seek clarity and efficiency in regulatory approvals, potentially affecting cross-border investments and M&A activity. Experts argue that while competition concerns must be addressed, the rigidity introduced by the ruling could slow down business decisions, increase compliance costs, and lead to legal uncertainties for companies navigating India’s insolvency resolution and acquisition processes.
While the judgment aims to uphold the integrity of competition law, businesses and dealmakers are now bracing for a more complex regulatory environment that may reshape the ease of doing business in India. With heightened scrutiny and extended approval timelines, the ruling is expected to influence future corporate transactions, particularly those involving distressed assets and insolvency-driven acquisitions, where swift resolutions are critical to value preservation and economic stability.
