BCP Asia II Topco II Pte. Ltd. — Combination C-2022/11/987

COMPETITION COMMISSION OF INDIA

13.02.2023 Notice under Section 6(2) of the Competition Act, 2002 filed by BCP Asia II Topco II Pte. Ltd

CORAM: Ms. Sangeeta Verma Acting Chairperson

Mr. Bhagwant Singh Bishnoi Member

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

1. On 28.11.2022, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act) filed by BCP Asia II Topco II Pte. Ltd. (Acquirer) pursuant to the share purchase agreement (SPA) dated 16.11.2022 between promoter shareholders of the Target (Sellers) and the Acquirer, and the public announcement dated 16.11.2022.

2. The proposed transaction pertains to the acquisition of up to 100% shareholding in the R Systems International Limited (Target) by the Acquirer through – (i) Acquisition of up to 51.67% of the total issued and subscribed share capital of the Target by the Acquirer from the promoter shareholders of the Target and (ii) Acquisition of additional shareholding in the Target pursuant to a composite offer (i.e., open offer combined with a delisting offer) (Composite Offer) to be made by the Acquirer (together with a person acting in concert) under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and applicable provisions of the Securities and Exchange Board of India

Combination Registration No. C-2022/11/987 (Delisting of Equity Shares) Regulations, 2021 (collectively, the Proposed Combination) (Hereinafter, Acquirer and Target are collectively referred to as the Parties).

3. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to transaction of business relating to combinations) Regulations, 2011 (Combination Regulations), the Parties were required to provide certain information(s)/clarification(s) relating to the Proposed Combination vide the Commission’s letter (RFI) dated 14.12.2022; response to the RFI was received on 21.12.2022. The Acquirer also provided certain information in relation to the Proposed Combination on 13.01.2023. Additionally, the Acquirer provided certain clarification(s) in relation to the RFI on 17.01.2023.

Parties to the Combination

BCP Asia II Topco II Pte. Ltd /Acquirer

4. The Acquirer is a company incorporated in Singapore, controlled by funds advised and/or managed by affiliates of Blackstone Inc. (collectively, Blackstone Group). It is stated that the Acquirer has not been engaged in providing any products / services and / or performing the business of investment holding in India or worldwide since its incorporation.

5. Blackstone Inc. is a global alternative asset manager headquartered in the United States. Blackstone Inc. operates as an investment management firm.

R Systems International Limited /Target

6. The Target is a public listed company incorporated in India and is the ultimate holding company within its group. The Target and its subsidiaries are engaged in the provision of information technology (IT) and IT enabled services (ITeS).

Identification of Overlaps and Relevant Markets

7. It is stated in the notice that the Acquirer does not directly engage in the provision of the overlapping products/services. However, certain Blackstone Portfolio Companies (Overlapping Blackstone PortCos) are engaged in businesses that are horizontally overlapping with the business of the Target in India. It is also stated that the Overlapping

Combination Registration No. C-2022/11/987

Blackstone PortCos and the Target (including its subsidiaries) have presence in the following segments: (i) Consulting Services, (ii) Application Implementation Services (AIS), (iii) Application Managed Services (AMS), and (iv) BPO Services.

8. With regard to vertical relationship, it is stated that there are no existing vertical relationships between the Overlapping Blackstone PortCos and the Target (including its subsidiaries). However, given the nature of the IT and ITeS market, any potential vertical linkages between the affiliates of the Acquirer and the Target (including its subsidiaries), would be in the ordinary course of business.

9. In addition, it is mentioned that there are certain existing supply arrangements between the affiliates of the Acquirer and the Target (including its subsidiaries) in CY 2021, as follows: (i) the Target provided consulting services to an affiliate of one of Blackstone’s portfolio companies, and (ii) the Target provided IT services to an affiliate of one of Blackstone’s portfolio companies.

10. It is submitted in the notice that, for the purpose of competition assessment of the Proposed Combination, the following relevant markets have been considered: At broad level, the market for IT & ITeS in India (Broad Relevant Market), and at a narrower level, (i) Consulting Services in India (ii) Application Implementation Services in India (iii) Application Managed Services in India, and (iv) BPO Services in India (collectively, Narrow Segments).

11. The Commission decided to leave the exact delineation of the relevant market open as it was observed that the Proposed Combination is not likely to cause an appreciable adverse effect on competition in any of the plausible alternative relevant markets that could be delineated due to the reasons stated in the subsequent paragraphs.

Competition Assessment

12. Based on the submission of the Parties, it is noted that the combined market share of the Parties in each of the Broad Relevant Market and Narrow Segments are insignificant to raise any competition concerns in India. Further, this sector is characterised by the presence of other global as well as domestic players, such as TCS, IBM, Wipro, Deloitte, and Microsoft.

Combination Registration No. C-2022/11/987

Moreover, it is mentioned that the Target earns its revenue primarily from North America, Europe, and South East Asian countries, and revenue generated in India constitutes (0-5) % of the consolidated revenue of the Target.

13. With regard to the existing supply arrangement, it is stated that the existing supply arrangements between the Target and affiliates of Blackstone’s portfolio companies form a miniscule portion of the Target’s revenue. Further, it is noted that the market shares of Target in the AMS, AIS, consulting and BPO segments in India is minuscule.

14. Considering the material on record, including details provided in the notice given under Section 6(2) of the Act and assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India in any of the relevant market(s), and therefore, the Commission hereby approves the same under Section 31(1) of the Act.

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

16. The information provided by the Parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

17. The Secretary is directed to communicate to the Parties accordingly.