DiaSys Diagnostics India Private Limited — Combination C-2015/09/313 (Part 1)
- Case No.C-2015/09/313
Ratio decidendi
The rule this decision rests on
The Commission may approve a combination under s.31(1) where, having regard to the facts disclosed and the factors in s.20(4), it is of the opinion that the combination has not caused, and is not likely to cause, an appreciable adverse effect on competition in India. Where the acquirer was previously a supplier to the target's seller with no significant direct presence in India, there is no horizontal overlap between the parties before the combination, and the absence of such overlap weighs against an appreciable adverse effect on competition. Where the seller exits the target business entirely on completion, and the business is carried on by the acquirer, and where there are many other players operating in the relevant sector in India, the combination is not likely to cause an appreciable adverse effect on competition and is approved on that basis.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Order under sub-section (1) of Section 31 of the Competition Act, 2002 (“Act”)
CORAM: Mr. Ashok Chawla Chairperson
Mr. S. L. Bunker Member
Mr. Sudhir Mital Member
Mr. Augustine Peter Member
Mr. M.S. Sahoo Member
Mr. U. C. Nahta Member
Mr. G. P. Mittal Member
Legal representative: Ramesh K. Vaidyanathan / Sharanya G. Ranga / Subodh Prasad Deo / Raghav Shah
1. On 28.09.2015, the Competition Commission of India (“Commission”) received a notice given by DiaSys Diagnostics India Private Limited (“DiaSys India”), pursuant to a direction issued under sub-section (1) of Section 20 of the Act read with Regulation 8 of the Competition Commission of India (Procedure in regard to COMPETITION COMMISSION OF INDIA For Greater Good transaction of business relating to combinations) Regulations, 2011. As per the information given in the notice, the combination relates to the acquisition of „lab diagnostics and point of care‟ business (“Target Business”) of Piramal Enterprises Limited (“Piramal”) by DiaSys India on a slump sale business.
2. For the purpose of the combination, DiaSys India and Piramal executed Sale and Purchase Agreement (“SPA”) on 15.09.2014. Apart from SPA, DiaSys India and Piramal have entered into a Technology Assignment Agreement on 15.09.2014 wherein Piramal has granted to DiaSys India a worldwide, exclusive, perpetual, irrevocable right to certain intellectual property rights relating to Target Business.
3. The combination falls under Section 5(a) of the Act.
4. DiaSys India is a private limited company registered in India and was created by DiaSys Diagnostic Systems GmbH, Germany (“DiaSys Germany”) as a wholly owned subsidiary for the purpose of acquiring the Target Business from Piramal. Accordingly, Diasys Germany together with Diasys India are to be deemed as the acquirers in the present case (hereinafter, Diasys Germany and Diasys India are together referred to as the “Acquirers”). DiaSys Germany is stated to be headquartered in Germany and is engaged in the development and manufacturing of quality diagnostic system solutions.
5. Further, Piramal is a company registered in India with presence in healthcare, financial services and information management sectors. Prior to the combination, Piramal was also engaged in the Target Business.
6. It is noted from the information given in the notice that prior to the combination, DiaSys Germany was a supplier/vendor to Piramal in respect of products covered under the Target business and DiaSys Germany had no significant direct presence in India. Thus, prior to the combination, there was no horizontal overlap between DiaSys Germany and Piramal. It has been further submitted that post combination, Piramal has completely exited the Target Business, which is being now carried on COMPETITION COMMISSION OF INDIA For Greater Good by DiaSys India. It is also noted that there are many players operating in India in this sector.
7. Considering the facts on record and the details provided in the notice given under sub-section (2) of Section 6 of the Act and the assessment of the combination after considering the relevant factors mentioned in sub-section (4) of Section 20 of the Act, the Commission is of the opinion that the combination has not caused any appreciable adverse effect on competition in India and therefore, the Commission hereby approves the combination under sub-section (1) of Section 31 of the Act.
8. This order is issued without prejudice to any proceedings under Section 43A of the Act.
9. This order shall stand revoked if, at any time, the information provided by the Acquirers is found to be incorrect.
10. The Secretary is directed to communicate to the Acquirers accordingly.
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