BCP Asia II Topco IV Pte. Ltd. — Combination C-2023/07/1044

COMPETITION COMMISSION OF INDIA 20th September 2023 Notice under Section 6(2) of the Competition Act, 2002 given by BCP Asia II Topco IV Pte. Ltd. CORAM: Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Order under Section 31(1) of the Competition Act, 2002 1. On 31st July 2023, the Competition Commission of India (Commission) received a notice (Notice), under Section 6(2) of the Competition Act, 2002 (Act), given by BCP Asia II Topco IV Pte. Ltd. (BCP Asia II). The Notice was given pursuant to execution of the Share Purchase Agreement between BCP Asia II, Quality Care India Limited (Care Hospitals/Target) and Touch Healthcare Private Limited (Touch Healthcare) on 3rd May 2023; and the Shareholders Agreement between Centella Mauritius Holdings Limited, BCP Asia II and Care Hospitals on 27th July 2023. 2. The Commission, vide its communication dated 14th August 2023, issued under Regulation 14(3) of the Competition Commission of India (Procedure in regard to transaction of business relating to combinations) Regulations, 2011, required the notifying party to remove defects from the Notice and furnish certain information relevant for the purpose of assessment of the proposed combination. The notifying party furnished its responses vide submissions dated 24th August 2023 and 30th August 2023. The notifying party also made voluntary submissions dated 12th September 2023. 3. The proposed combination envisages an acquisition of ~72.49% equity shareholding of the Care Hospitals, on a fully diluted basis, by BCP Asia II from Touch Healthcare (Proposed Combination). BCP Asia II, being majority shareholding of Care Hospitals, would have the rights available to majority shareholders under the Companies Act, 2013. Further, it would also have certain contractual rights as well.

4. BCP Asia II is a newly incorporated entity and has not been engaged in providing any products/services and/or performing the business of investment holding in India or worldwide since its incorporation. It is controlled by funds advised and/or managed by affiliates of Blackstone Inc. (collectively, Blackstone Group). Blackstone Inc. operates as an investment management firm.

5. The Target is a multispecialty healthcare provider established in 1997. It operates a network of multi-speciality hospitals under the brand name ‘CARE Hospitals’ in various cities in India. It, directly and through its downstream affiliates, has 17 healthcare facilities, viz., 16 hospitals and 1 clinic serving 7 cities, viz., Aurangabad, Bhubaneshwar, Hyderabad, Indore, Nagpur, Raipur, and Visakhapatnam, across 6 states in India. It has also been submitted that the Target has executed transaction documents on 10th September 2023 for the acquisition of an entity engaged in operating hospitals and medical centers/clinics.

6. One of the portfolio companies of Blackstone Group is engaged in the supply of surgical/hospital consumables such as face masks, surgical gloves, gowns and drapes, sterilization wrap, etc. in India. Further, Care Hospitals and its downstream affiliates provide healthcare services. Therefore, activities of the portfolio company and Care Hospitals exhibit vertical interface/complementarity.

7. It has been submitted by the notifying party that the portfolio company of the Blackstone Group miniscule sales to customers in India. The value of hospital/surgical consumables purchased by Care Hospitals and its downstream affiliates in FY 2022- 23 was many times of the value of total sales made by the portfolio company in India in 2022. Even if the portfolio company sold all of its supplies to the healthcare facilities operated by Care Hospitals and its downstream affiliates, they would have to procure additional supplies from its competitors, indicating that no possible foreclosure. From the demand side, the products segment is characterised by presence of several players. As of November 2020, there were approximately 69,000 hospitals in India. Further, there are several standalone hospitals, nursing homes and private clinics in India which also procure surgical/hospital consumables for providing healthcare services. From supply side, the products segment is characterised by presence of other suppliers such as 3M Healthcare, Ansell, G Surgiwear, etc. In view of the above, this vertical interface/complementarity is not likely to raise any competition concern.

8. The Commission decides to leave precise delineation of relevant market open as the Proposed Combination is not likely to raise any competition concern irrespective of manner in which the relevant market is delineated.

9. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on 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 Proposed Combination under Section 31(1) of the Act.

10. This order may be revoked if, at any time, the information provided by the notifying party is found to be incorrect.

11. It is made clear that nothing contained in this order shall be deemed to be confidential as the same has been used for the purposes of the Act in terms of the provisions contained in Section 57 of the Act.

12. The Secretary is directed to communicate this order to the notifying party.