Allcargo Logistics Limited — Combination C-2022/07/956

Notice filed by Allcargo Logistics Limited pursuant to the directions issued under Section 20(1) and Section 43A of the Competition Act, 2002 read with Regulation 8(2) of the Competition Commission of India (Procedure in Regard to the Transaction of Business relating to Commission) Regulations, 2011 and Regulation 48 of the Competition Commission of India (General) Regulations, 2009.

CORAM: Mr. Ashok Kumar Gupta Chairperson

Ms. Sangeeta Verma Member

Mr. Bhagwant Singh Bishnoi Member

Order under Section 31(1) of the Competition Act, 2002

1. On 18.07.2022, the Competition Commission of India (Commission) received a notice (Notice) filed by Allcargo Logistics Limited (Allcargo/Acquirer). The Notice has been filed pursuant to the direction of the Commission, communicated vide letter dated 15.06.2022, to Allcargo to file notice in Form-I in relation to the acquisition of 46.86% of the equity share capital in Gati Limited (Gati/Target). Hereinafter, the said acquisition is referred to as Combination. The Acquirer has also provided certain information(s)/ clarification(s) necessary to carry-out the competition assessment of the Combination, vide its submissions dated 01.09.2022 and 26.09.2022.

Combination Registration No. C-2022/07/956

Background

2. Earlier, in response to inquiry under Section 20(1) and 43A of the Competition Act, 2002 (Act), Allcargo had submitted that it had completed the acquisition of 46.86% equity shares in Gati. The Commission, vide its order dated 02.05.2022, passed under Section 43A of the Act, inter alia, observed that there was an obligation upon Allcargo to file a notice prior to acquisition of 46.86% stake in Gati, under Section 6(2) of the Act. Accordingly, the Commission, vide its letter dated 15.06.2022, directed Allcargo to file notice in Form-I in relation to the said Combination.

Allcargo

3. Allcargo is a public listed company incorporated in India, The principal activity of Allcargo is to provide integrated logistics solutions in the country. It offers specialised logistics services across various business segments viz., Multimodal Transport Operations, Container Freight Station and Inland Container Depot operations, Project and Engineering Solutions, Warehousing & logistics Park.

Gati

4. Gati is a public listed company incorporated in India. It is engaged in the business of express distribution (surface, air and rail parcel), supply chain management solutions, value added transportation solutions, e-commerce logistics and operation of fuel stations. It involves transport of goods for domestic requirements between two locations within India to a business customer.

Identification of Overlaps

5. It is observed that both the Acquirer and the Target are present in the overall logistics sector in India. However, it is submitted by the Acquirer in the notice that the services provided by Allcargo and Gati in the logistics sector are distinct and exclusive of each other. It is stated that Allcargo is engaged in heavyweight logistics services, whereas Gati is engaged in Combination Registration No. C-2022/07/956 express, door to door and lightweight logistics services. Further, based on the submissions, it is noted that there is no vertical relationship between the activities of the Parties, as Allcargo is involved in a different business segment, there is no single supply chain which can be established.

6. Based on the submissions of the Acquirer, it is noted that there is no overlap between the activities of Acquirer and the Target. In the absence of overlaps, it appears that the Combination is not likely to raise any competition concern in India in the logistics sector.

7. Considering the material on record, including details provided in the notice and assessment of the Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Combination is not likely to have any appreciable adverse effect on competition in India and therefore, the Commission approves the same under Section 31(1) of the Act.

8. This order may be revoked if, at any time, the information provided by the Acquirer is found to be incorrect.

9. The Secretary is directed to communicate to the Acquirer accordingly.