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      Question

      Company X acquired Company Y, resulting in a combined

      market share of 45% in a market where the top two players have 35% and 40% shares. The CCI is assessing the merger's competitive impact. Which statements are correct? Statement 1: The merger is automatically prohibited because combined share exceeds 40%. Statement 2: The CCI must assess whether the merger substantially lessens competition before approving or rejecting. Statement 3: The CCI can approve the merger with conditions such as divestiture of overlapping business. Statement 4: Historical information about the parties' competitive behavior is irrelevant to merger assessment. Which statements are correct?
      A Statements 2 and 3 only Correct Answer Incorrect Answer
      B Statements 1 and 4 only Correct Answer Incorrect Answer
      C Statements 1, 2, and 3 only Correct Answer Incorrect Answer
      D Statements 1 and 3 only Correct Answer Incorrect Answer
      E All statements are correct Correct Answer Incorrect Answer

      Solution

      Market share alone doesn't trigger prohibitionā€”Statement 1 is incorrect. CCI must assess competitive impactā€”Statement 2 is correct. Conditions can be imposedā€”Statement 3 is correct. Historical behavior is relevantā€”Statement 4 is incorrect. Statements 2 and 3 are correct.

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