Central Bank of India — Combination C-2024/08/1180

Notice under Section 6(2) of the Competition Act, 2002 given by Central Bank of India

CORAM:

Ms. Ravneet Kaur Chairperson

Mr. Anil Agrawal Member

Ms. Sweta Kakkad Member

Mr. Deepak Anurag Member

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

1. On 28th August 2024, the Competition Commission of India (Commission) received a notice (Notice) under sub-section (2) of Section 6 of the Competition Act, 2002 (Act) given by Central Bank of India (Acquirer). The Notice was given pursuant to inter alia Revised Bid dated 3rd May 2024 of the Acquirer to acquire Cluster I assets of Future Enterprises Limited (FEL) under the Corporate Insolvency Resolution Process.

2. The notifying party, vide communications dated 9th September 2024 and 18th September 2024 issued under Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations), was required to remove defects from Combination Registration No. C-2024/07/1166 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 16th September 2024 and 24th September 2024.

3. It has been submitted that the Acquirer submitted a bid/resolution plan for cluster I assets comprised of the following:

a.) 0.51% equity stake of FEL in Future Generali India Insurance Company Limited (Future Generali General Insurance); b.) 25.18% equity stake of FEL in Future Generali India Life Insurance Company Limited (Future Generali Life Insurance); c.) 49.81% equity stake of FEL in Sprint Advisory Private Limited (Sprint Advisory); and d.) 49.82% equity stake of FEL in Shendra Advisory Private Limited (Shendra Advisory).

Through the liquidation process of Sprint, FEL stake in FGILICL increased to 25.18%,

4. Sprint Advisory had only one asset viz., 49% stake in Future Generali Life Insurance. On 24th March 2022, the Board of Directors of the company proposed to initiate voluntary liquidation under the provisions of the Insolvency & Bankruptcy Code, 2016 (IBC). The shares held by Sprint Advisory have already been distributed after its voluntary liquidation at the time of calling for Expression of Interest (EOI) by Resolution Professional (RP), pending a final dissolution order by the National Company Law Tribunal (NCLT). Hence, sale of 49.81% Equity Stake of FEL in Sprint Advisory was included in Category I assets by RP. The dissolution order for Sprint Advisory has been passed by the NCLT, Mumbai Bench on 16th May 2024.

5. Further, on 27th April 2022, the Board of Directors of Shendra Advisory proposed to initiate voluntary liquidation under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). Shendra Advisory has only one asset viz., 49% stake in Future

Combination Registration No. C-2024/07/1166

Generali General Insurance. RP has already filed an application to the Insurance Regulatory and Development Authority of India (IRDAI) along with Generali Participations Netherlands N.V. (Generali Participations), requesting its consent for the distribution of the shares of Future Generali General Insurance held by Shendra Advisory to its shareholders. Through the liquidation process of Shendra Advisory, FEL’s stake in Future Generali General Insurance will increase from 0.5l% to 24.91%. Therefore, the Proposed Combination envisages the acquisition of:

a) 24.91% Equity Stake of FEL in Future Generali General Insurance; and b) 25.18% Equity Stake of FEL in Future Generali Life Insurance.

6. The Acquirer is a public sector bank having majority shareholding by the Government of India.

7. Future Generali Life Insurance is engaged in the business of provision of life insurance services in India. It is present in 103 locations in India and 4000+ agents are associated with it. Further, it has 1357 self and partner branches.

8. Future Generali General Insurance is engaged in the general insurance services business in India. It is present in 153 locations in India and 19000+ agents are associated with it.

9. The Acquirer is engaged inter alia in the distribution of insurance products. Therefore, the provision of life insurance products by Future Generali Life Insurance, and general insurance products by Future Generali General Insurance on one hand; and the distribution of insurance products by the Acquirer on the other exhibit vertical interface.

10. The market share of each of Future Generali Life Insurance, Future Generali General, and Central Bank of India for the overlapping activities is [0-5]%. The General Insurance space is characterised by the presence of other players such as the New India Assurance, United India Insurance, Oriental Insurance, HDFC Ergo, and ICICI

Combination Registration No. C-2024/07/1166

Lombard. Similarly, the Life Insurance space is characterised by the presence of other players such as Life Insurance Corporation, SBI Life Insurance, HDFC Life Insurance, ICICI Prudential, and Max Life Insurance. The insurance products distribution space is characterised by the presence of inter alia State Bank of India, Punjab National Bank, Canara Bank, Union Bank of India, Bank of Baroda.

11. Considering the material on record, including the details provided in the notice and the 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 appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

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

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

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