Jointly by (i) M/s KONINKLIJKE DSM N.V., The Netherlands; (ii) M/s FIRMENICH INTERNATIONAL SA, Switzerland; and (iii) M/s Danube AG, Switzerland — Combination C-2023/03/1009

Notice under Section 6(2) of the Competition Act, 2002 jointly given by Koninklijke DSM N.V., Firmenich International S.A. and Danube A.G.

CORAM:

Ms. Sangeeta Verma Acting Chairperson

Mr. Bhagwant Singh Bishnoi Member

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

1. On 15th March 2023, the Competition Commission of India (‘Commission’) received a Notice under Section 6(2) of the Competition Act, 2002 (‘Act’) jointly given by Koninklijke DSM N.V. (‘DSM’), Firmenich International S.A. (‘Firmenich’) and Danube A.G. (‘Danube’) (Hereinafter, Danube, DSM and Firmenich are referred to as ‘Parties’).

2. The Notice was filed pursuant to the execution of Business Combination Agreement dated 30th May 2022 among DSM, Firmenich, the shareholders of Firmenich and Danube. The Parties have made additional voluntary submissions, which were filed on 28th March 2023 and 29th March 2023.

Invalidation of Earlier Notice

3. The Proposed Combination was earlier notified to the Commission in Form I on 28th November 2022 vide Combination Registration. No. C-2022/11/988 (‘Earlier Notice’). It was observed that the Earlier Notice contained several information gaps and deficiencies. Therefore, vide letters dated 16th December 2022 and 5th January 2023, issued under Regulation 14(3) of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (‘Combination Regulations’), the notifying parties were required to furnish the requisite information. The notifying parties submitted their responses on 22nd December 2022, 17th January 2023 and 30th January 2023. It was found that the Earlier Notice continued to remain defective and the Parties failed to cure them in spite of the opportunity provided by the Commission. As the Earlier Notice exhibited deficiencies and information gaps and was not in conformity with the requirements of the Combination Regulations, the Commission invalidated the Notice in terms of Regulation 14(2A) of the Combination Regulations and directed the Parties to furnish a notice afresh, after curing the deficiencies. In terms of Regulation 5(5) of the Combination Regulations, the Parties were directed to give fresh notice in Form II. The directions of the Commission were communicated to the Parties vide order dated 14th February 2023. The Parties filed the instant notice, i.e., Notice, on 15th March 2023.

The Proposed Combination

4. The Proposed Combination envisages a merger between DSM and Firmenich to form DSM-Firmenich, a Swiss-domiciled company, whose shares are proposed to be listed on Euronext Amsterdam. Pursuant to the Proposed Combination, DSM shareholders will hold 65.5% and Firmenich shareholders will hold 34.5% of Danube’s (renamed as DSM-Firmenich) total share capital.

5. DSM is a public limited liability company headquartered in the Netherlands. The shares of DSM are listed on the Euronext Amsterdam. DSM is the ultimate parent company of an international business group active in nutrition, health and bioscience. It has three market-focused business groups in which it organises its activities, namely, (i) animal nutrition and health; (ii) health, nutrition, and care; and (iii) food and beverages.

6. DSM’s activities in India comprise, inter alia: (i) sale of aroma chemicals, flavours, savoury ingredients, vitamins, nutraceuticals, carotenoids, sun filters, personal care actives, trace minerals, specialised biomedical products, etc.; (ii) manufacture, premixing of animal nutritional health products and human nutritional health products, and import, export and distribution of nutritional and health products; and (iii) import of feed additives and eubiotics to India, selling to distributors and providing marketing services to DSM.

7. Firmenich is a privately owned company headquartered in Geneva, Switzerland. It specialises in the production and sale of fragrances, flavours and aroma chemicals. It also produces rosin resin and turpentine.

8. Firmenich’s activities in India comprise manufacture, import/export and sale of aroma chemicals, flavours and fragrances.

9. Danube is a newly incorporated wholly owned subsidiary of DSM, with its registered seat in Switzerland. It is presently not engaged in any commercial activity.

Overlaps

10. Based on the information provided in the Notice, it is observed that DSM and Firmenich are broadly engaged in the ‘flavours and fragrances’ sector in India. Within this, these entities exhibit horizontal overlaps in the broad segment of the supply of aroma chemicals and flavours.

11. DSM and Firmenich exhibit the following vertical overlaps: (i) Existing relationship: supply of aroma chemicals (upstream market) by DSM to Firmenich for manufacture/sale of flavours and fragrances (downstream market); (ii) Potential relationship: DSM’s presence in the savoury ingredients market in India (upstream market) and Firmenich’s presence in the flavours market in India (downstream market); (iii) Potential relationship: DSM’s presence in the beta-carotene market in India (upstream market) and Firmenich’s presence in systems for food applications in India (downstream market); and (iv) Potential relationship: DSM’s presence in each of vitamins A, B5 and B6 in India (upstream market) and Firmenich’s presence in systems for food applications in India (downstream market).

12. Additionally, the Proposed Combination would also give rise to complementary relationships between the supply of various products (enzymes, vitamin A, vitamin B5, vitamin B6, beta-carotene and cultures) by DSM to the manufacture/sale of flavours by Firmenich.

Relevant Product Markets

A. Aroma Chemicals Market

13. It is submitted by the Parties that the aroma chemicals (sometimes simply referred to as ‘ingredients’) are chemical substances (‘molecules’) with a distinctive flavour and odour. Aroma chemicals are used either as an input for internal consumption or sold to third parties as raw material for the production and sale of flavours and fragrances.

14. The Parties have identified the ‘market for sale of aroma chemicals in India’ as the relevant market and submitted that there is no basis for delineating this market further based on considerations such as end-use and characteristics. This is elaborated in the ensuing paragraphs.

Distinction between end-use of aroma chemicals

15. Aroma chemical manufacturers typically utilise common facilities and common machinery to manufacture aroma chemicals for all end-uses (including for use in flavour or fragrance compositions). Typically, aroma chemical producers can and do produce a wide range of aroma chemicals irrespective of its end-use and can switch production relatively easily with low costs from one aroma chemical to another once the production equipment has been cleaned. In general, large aroma chemical manufacturers produce a wide range of aroma chemicals across end-uses and do not specialise in particular (or particular categories of) aroma chemicals. In fact, the exact end-product in which the supplied aroma chemical ends up is typically not known to aroma chemical manufacturers.

16. Customers for aroma chemicals typically purchase a range of aroma chemicals for various end-uses, irrespective of characteristics.

17. The high degree of supply-side substitutability enables manufacturers of aroma chemicals to switch production between aroma chemicals irrespective of end-use or characteristics without any significant delay, expense or the requirement for technical adjustment.

Distinction between edible and non-edible aroma chemicals

18. It is submitted that, in general, aroma chemicals do not have anything to do with edible sourcing or non-edible end-uses, and a large range of aroma chemicals are used in both edible and non-edible end-products. Such categorisation (edible/non-edible) is not considered relevant from a manufacturing perspective nor from a customer perspective.

Distinction between natural and synthetic aroma chemicals

19. Based on their source, aroma chemicals may be categorised as follows: (i) natural (derived from natural sources (i.e., plants or animals) or microorganisms (by way of fermentation, and (ii) synthetic (produced by humans by chemical synthesis). Both from a supply-side and a demand-side perspective, synthetic and natural aroma chemicals belong to the same overall aroma chemicals market. The market is characterised by a high degree of substitutability, as all major manufacturers of aroma chemicals have the capacity, know-how and technical capabilities to supply customers with a wide range of aroma chemicals, irrespective of whether aroma chemicals are derived from synthetic or natural ingredients. From a demand-side perspective as well, synthetic or natural-based aroma chemicals can be interchangeably used.

20. Notwithstanding the above, the Parties have sub-segmented the aroma chemicals market into natural aroma chemicals and synthetic aroma chemicals. It is submitted that DSM is not active in the natural aroma chemical segment in India or globally, and hence, Parties exhibit overlap only in the sub-segment of synthetic aroma chemicals.

21. Commission’s view: Based on the submission of the Parties, it appears that the market is characterised by a high degree of supply-side substitutability. While the Parties have submitted that the relevant market should not be segregated, competition assessment has been carried out for the broad market of aroma chemicals as well as for the overlapping synthetic aroma chemical sub-segment. However, as the Proposed Combination does not raise competition concerns in any of these markets, the exact delineation of the relevant market is being left open.

B. Flavours Market

22. It is submitted by the Parties that flavours are compounds of naturally occurring and/or synthetically manufactured ingredients to impart flavour to materials designated for human consumption or animal feeding. They are used in a wide range of products, including processed foods, drinks, chewing gums, pharmaceutical products, tobacco and fodder. The function of a flavour is to simulate the original flavour, to maintain its character and to enhance a flavour impression and its acceptability.

23. The Parties have submitted that the ‘market for sale of flavours in India’ may be considered as the relevant market. Flavours are characterised by a high degree of supply-side substitutability. The production of flavours is predominantly low-tech and based on common applicable production methodology, equipment and know-how. Flavour manufacturers are able to convert the production of one flavour composition to the manufacture of another without any significant delay or expense or the need for technical adjustments. It is the ‘inputs’ (i.e., ingredients) which vary according to the required specifications. Consequently, it is capability rather than actual production that creates competitive pressure in the market which, in turn, makes supply-side substitutability the decisive factor when defining the relevant product market. Accordingly, it is submitted that there is no basis for delineating the market for flavours further based on considerations such as end-use or characteristics.

Distinction between natural and synthetic flavours

24. Flavours may be (i) natural (i.e., derived from natural sources such as fruits) or (ii) synthetic (based on chemical ingredients). Natural and synthetic flavours belong to the same overall flavours market, both from a supply-side and from a demand-side perspective. The market for flavours is characterised by a high degree of supply-side substitutability, as each of the major manufacturers of flavours has the capacity, know-how and the technical capabilities to supply customers with a wide range of flavours, notwithstanding that flavours are created by the application of different production technologies. The above applies across the entire flavours market, irrespective of whether the flavours are natural or synthetic. From a demand-side perspective, natural and synthetic flavours can be interchangeably used.

25. Notwithstanding the above, the Parties have sub-segmented the flavours market into natural flavours and synthetic flavours. It is submitted that Parties exhibit horizontal overlap only in the sub-segment of natural flavours.1

Distinction based on end-use

26. The end-use of flavours may be categorised across various segments such as beverage, savoury, confectionery and dairy. Flavour manufacturers typically utilise common facilities to manufacture flavours for all end-uses and can switch production relatively easily from one flavour to another at a low cost. Further, flavour manufacturers produce a wide range of flavours across end-uses and do not specialise in particular (or categories of) flavours.

27. Notwithstanding the above, the Parties have sub-segmented the flavours based on end-use as well. It is submitted that Parties exhibit horizontal overlap in the sub-segments of dairy flavours2 and savoury flavours.3

28. Commission’s view: Based on the submission of the Parties, it appears that the market is characterised by a high degree of supply-side substitutability. While the Parties have submitted that the relevant market should not be segregated, competition assessment has been carried out for the broad market of flavours as well as for the overlapping sub-segments of natural flavours, dairy flavours and savoury flavours. However, as the Proposed Combination does not raise competition concerns in any of these markets, the exact delineation of relevant market is being left open.

1 Natural flavours are flavours that are derived from plant or animal sources, including fruit, meat, fish, spices, herbs, roots, leaves, buds or bark. 2 Flavours used for dairy applications such as milk/dairy drinks, fresh cheese/cream cheese, ice cream, and yogurt. 3 Flavours used for the production of savoury products such as proteins, soups, noodles and prepared meals.

C. Fragrances Market

29. It is submitted by the Parties that fragrances are blends of natural, synthetic and/or biotechnology origin, giving scent to or masking bad odour of a wide range of products. They are manufactured by blending natural and/or synthetic ingredients and diluting them with solvents to the desired concentration. Fragrances are used for the manufacture of fine perfume products, cosmetic products and many other kinds of products such as laundry detergents, fabric softeners, dishwasher detergents, cleaners and air fresheners.

30. The Parties have submitted that the ‘market for production and sale of fragrances in India’ may be considered as a relevant market. Fragrances are characterised by a high degree of supply-side substitutability. It is submitted that any fragrance producer can and does produce any fragrance irrespective of its end-use and can switch production relatively easily from one fragrance to another once the production equipment is cleaned. Fragrance manufacturers are not specialised with regard to particular fragrances and are, in fact, able to produce fragrances for all the most important applications. Further, even though various fragrance compositions are often developed individually by manufacturers in close cooperation with their customers, it is normally possible to get the same or a very similar product from a new supplier. Further, the Parties consider that the fragrances market should not be delineated further based on end-use, characteristics, premium/mass fragrances, male/female fragrances, etc.

Distinction based on end use or characteristics

31. Fragrance manufacturers typically utilise common facilities and common machinery to manufacture fragrances for all end-uses or characteristics (i.e., natural or synthetic). Further, the customers for fragrances (such as large FMCG companies) typically purchase a range of fragrances for various end-uses. Additionally, given the high degree of supply-side substitutability, manufacturers of fragrances are able to switch production between fragrances irrespective of end-use or application without any significant delay or expense or the requirement for technical adjustment.

32. Notwithstanding the above, the Parties have sub-segmented the fragrances based on end-use into two categories, namely, consumer product fragrances (fragrances for household and personal care products) and fine fragrances (fragrances for perfumes), where Firmenich is present in India.

Distinction based on male/female fragrance and premium/mass fragrances

33. It is submitted that, both from a supply-side and a demand-side perspective, premium/mass fragrances and male/female fragrances belong to the same overall fragrances market. The market for fragrances is characterised by a high degree of substitutability. Although the products are created by the application of different production technologies, each of the major manufacturers of fragrances has the capacity, know-how and the technical capabilities to supply its customers with a wide range of fragrances. The above applies across the entire fragrances market, irrespective of whether fragrances are used for premium/mass fragrances or male/female fragrances. In addition, it is submitted that there are no specialised firms in India offering only premium/mass fragrances or male/ female fragrances in India. From the demand-side perspective, premium/mass fragrances and male/female fragrances can be interchangeably used.

34. Commission’s view: Based on the submission of the Parties, it appears that the market is characterised by a high degree of supply-side substitutability. While the Parties have submitted that the relevant market should not be segregated, competition assessment has been carried out for the broad market of fragrances as well as its sub-segments of consumer product and fine fragrances. However, as the Proposed Combination does not raise competition concerns any in any of these markets, the exact delineation of the relevant market is being left open.

D. Savoury Ingredients Market

35. It is submitted by the Parties that savoury ingredients are ingredients that enhance the overall sensory quality of a food product. They are typically used for meaty, umami flavour notes and are often made from a non-meat-based raw material source. Food manufacturers can thus give their products a meaty flavour without actually using any animal source ingredients. Key examples of savoury ingredients are yeast extracts, yeast extract-based process flavours, hydrolysed vegetable protein, hydrolysed animal protein and nucleotides. Savoury ingredients are typically an input in the market for production of ‘flavours’ and sold to manufacturers of flavours as well as directly to food manufacturers for application in savoury foods such as chips, sauces and soups.

36. The Parties have submitted that the ‘market for sale of savoury ingredients in India’ may be considered as a relevant market. Savoury ingredients are characterised by a high degree of supply-side substitutability. Although savoury ingredient products have different production technologies, most producers are able to produce and supply all of these products. Consequently, it is the capability of the producers rather than their actual production that creates competitive pressure in the market which, in turn, makes supply-side substitutability the decisive factor when defining the relevant product market.

37. Commission’s view: Based on the submission of the Parties, the Commission has considered the relevant product market as the ‘market for sale of savoury ingredients’.

E. Systems for Food Applications Market

38. It is submitted that ‘systems’ are products that consist of two or more ingredients (e.g., alginates, carrageenan, MCC, pectin), which are blended together. These products usually contain a multitude of ingredients in different ratios that are sold to customers as a ready-made blend or mix. It is submitted by the Parties that, since Firmenich does not offer systems for other applications such as industrial or pharmaceuticals, for the purpose of assessment, only the market for systems for food applications is considered.

A vast majority of Firmenich’s Systems offerings are blends of flavours and an additional ingredient providing enhanced flavours performance, such as fibres and sweeteners.

39. It is submitted that the manufacturing of systems is driven by consumer demand and is ever-changing. Therefore, there is no list of all systems, but it is confirmed by the Parties that all players in this market can offer a wide range of customised solutions to customers. Accordingly, the Parties have considered the relevant market as ‘market for sale of systems for food applications in India’.

40. Commission’s view: Based on the submission of the Parties, the Commission has considered the relevant product market as the ‘market for sale of systems for food applications’.

F. Vitamins

41. It is submitted by the Parties that vitamins are a group of micronutrients of various types of organic compounds required in small amounts in human and animal diet for normal growth, development and maintenance of life. Their physiological function in the organism and mode of action are diverse. For instance, while certain vitamins are essential sources of coenzymes necessary for metabolism, others are involved in the metabolism of other vitamins. All known vitamins can be synthesised chemically.

42. It is submitted that DSM is a manufacturer and supplier of vitamins for human consumption, such as vitamins A, B5 and B6. Accordingly, the Parties have submitted that markets for sale of vitamin A, vitamin B5 and vitamin B6 may each be considered as a separate relevant product market.

43. Commission’s view: Based on the submission of the Parties, the Commission has considered the relevant product market as the ‘market for sale of vitamin A’, ‘market for sale of vitamin B5’ and ‘market for sale of vitamin B6’.

G. Enzymes

44. It is submitted by the Parties that enzymes are biological catalysts that regulate the rate at which chemical reactions proceed in living organisms. They can be used as ingredients and as processing aids in a variety of applications. Accordingly, ‘market for sale of enzymes in India’ may be considered as the relevant market.

45. Commission’s view: Based on the submission of the Parties, the Commission has considered the relevant product market as the ‘market for sale of enzymes’.

H. Cultures

46. It is submitted that cultures are living microorganisms such as bacteria, yeast or mould used in food and beverage manufacturing, animal and plant health and animal feed. They have a beneficial impact when used in a production process or are included in a final product. Accordingly, ‘market for sale of cultures in India’ may be considered as a relevant market.

47. Commission’s view: Based on the submission of the Parties, the Commission has considered the relevant product market as the ‘market for sale of cultures’.

I. Beta-Carotene

48. It is submitted that beta-carotene is a provitamin A that is converted into vitamin A when ingested by a living organism. Beta-carotene is, in large part, used in food applications (as dietary supplement and for food colouring), particularly, in beverages. Beta-carotene can be found in the synthetic and natural form. The Parties have submitted that DSM sells mostly synthetic beta-carotene in India.

49. The Parties have submitted that the ‘market for sale of beta-carotene in India’ may be considered as a relevant market.

50. Commission’s view: In the Commission’s view, the relevant product market may be defined as ‘market for sale of beta-carotene’.

Relevant Geographic Markets

51. With respect to the aroma chemicals, flavours, fragrances and savoury ingredients markets, the Parties have submitted that, based on factors such as (a) no local specification requirements for these products in India and the homogeneous conditions for the market across the country; (b) no specific licensing/registration requirements for manufacture, production or sale of these products in India, unless the manufacture of these products involves certain compounds/ingredients which require prior permission from the central government or the state government under the Narcotic Drugs and Psychotropic Substances Act, 1985; and/or (c) standard transportation costs, allowing these products to be transported throughout the country as any other similar product and international jurisprudence, the Parties have considered the geographic market as pan- India.

52. With respect to the vitamins A, B5, and B6, cultures, enzymes, beta-carotene and systems for food applications markets, the Parties have submitted that each of these markets are worldwide in scope. Accordingly, it is submitted that the relevant markets are, at the very least, national in scope.

53. Commission’s view: The Commission agrees that the relevant geographic market for all the above-mentioned markets (including sub-segments thereof, if any) may only be pan- India but decided to leave the exact delineation of the relevant market open.

Competition Assessment

Horizontal Overlaps

54. Based on the submission of the Parties, it is observed that the Parties exhibit horizontal overlaps in the (i) broad market for sale of aroma chemicals in India and the narrow sub-segment of sale of synthetic aroma chemicals in India; and (ii) broad market for the sale of flavours in India and the narrow sub-segments of sale of natural flavours, savoury flavours and dairy flavours in India.

55. The Parties have submitted that their assessment is based on the IAL Report on Aroma Chemicals (December 2022) where the market size does not take into account the unorganised sector in India, while it may take into account smaller organised players. The Parties have also submitted that they face competition from the smaller players and the unorganised sector in India as well. And thus, Parties claim that their market shares may be overestimated.

56. Notwithstanding the above, based on the submission of the Parties, it is observed that the combined market share of Parties in the aroma chemicals market in India is in the range of [15-20]% in terms of value and volume. Further, the combined market share of Parties in the synthetic aroma chemicals segment is in the range of [15-20]% in value terms and [20-25]% in volume terms. The incremental market share is in the range of [5-10]% in terms of volume and value for the broad market as well as narrow sub-segment. While, post the Proposed Combination, the Parties will become leaders in the market for sale of aroma chemicals in India, the market appears to be fragmented with the presence of other global and Indian players such as International Flavors & Fragrances Incorporated (IFF), Privi Speciality Chemicals Limited (Privi), BASF SE, Eternis, Givaudan SA and Symrise AG, which are likely to exert competitive constraints on the Parties.

57. Similarly, the Parties have submitted that the market size for flavours market is taken into account based on the IAL Report on Global Overview of Flavours and Fragrances Market (Asia Pacific) September 2020 which, according to DSM and Firmenich, does not take into account the unorganised sector in India at all, while it may take into account smaller, organised players. Further, the Parties maintain that DSM and Firmenich face competition from the smaller players and the unorganised sector in India in the flavours market in India as well.

58. Notwithstanding the above, based on the submission of the Parties, it is observed that the combined market share of Parties in flavours market is in the range of [5-10]% in value terms and [10-15]% in volume terms. The combined market share in sub-segments of natural flavours and dairy flavours is [0-5]% in value as well as volume terms. Further, the combined market share in sub-segment of savoury flavours is [10-15]% in value terms and [15-20]% in volume terms. The incremental market share is insignificant in terms of volume and value for the broad market as well as narrow sub-segments as DSM is a new entrant in the market pursuant to its acquisition of First Choice Ingredients. The market is characterised by the presence of other large players such as IFF, Givaudan SA, Symega, Symrise AG and Kerry Group PLC.

Vertical Overlaps

59. Based on the submission of the Parties, it is observed that the Parties exhibit vertical overlap in the following markets: (i) Existing relationship: supply of aroma chemicals (upstream market) by DSM to Firmenich for manufacture/sale of flavours and fragrances (downstream markets). DSM’s market share in the upstream market is in the range of [5-10]% in terms of value. Firmenich’s market share in the downstream market of sale of flavours is in the range of [5-10]% in terms of value. Further, in the downstream market for sale of fragrances, Firmenich’s market share is between [15-20]% in terms of volume and value. In the narrower sub-segments of the fragrance market, namely, fine fragrances and consumer fragrances, the market share of Firmenich is between [10-15]% and [15-20]%, respectively.

(ii) Potential relationship: DSM’s presence in the savoury ingredients market in India (upstream market) and Firmenich’s presence in the flavours market in India (downstream market). DSM’s presence in the upstream market is [0-5]%, and this market has several players including CJ BIO Incorported, Innovative Heath Care India Private Limited, Titan Biotech Limited, Symega Food Ingredients Limited, and AB Mauri. Firmenich’s presence in the downstream market is [5-10]%, as discussed in the foregoing paragraphs.

(iii) Potential relationship: DSM’s presence in the beta-carotene market in India (upstream market) and Firmenich’s presence in the market systems for food applications in India (downstream market). DSM’s presence in the upstream market is [25-30]% and Firmenich’s presence in the downstream market is [30-35]% in terms of value. The Parties have submitted that DSM’s competitors in the upstream market, namely, Pharmatech Asia Group Limited and Divis Laboratories, and Firmenich’s competitors in the downstream market, namely, Givaudan, IFF, and Symrise, would continue to exert competitive pressures.

(iv) Potential relationship: DSM’s presence in the market for each of vitamins A, B5 and B6 in India (upstream markets) and Firmenich’s presence in the market for systems for food applications in India (downstream market). DSM’s presence in the upstream markets of vitamins A, B5 and B6 markets in India is [20-25]%, [30-35]% and [15-20]% in value terms, respectively, whereas Firmenich’s presence in the downstream market is [30-35]% in terms of value. The Parties have submitted that their biggest competitors, namely, Givaudan, IFF, and Symrise, are also prominent actors in the market for systems for food applications.

60. Based on the foregoing, it appears that the Proposed Combination is not likely to foreclose competition in any market in India.

Complementary Overlaps

61. Based on the submission of the Parties, it is observed that DSM’s presence in the markets for sale of enzymes, cultures, beta-carotene, vitamin A, vitamin B5 and vitamin B6 may be considered as complementary to the activities of Firmenich in the flavours market in India.

62. Based on the submission of the DSM and Firmenich and their presence in each of these markets, it is observed that the Proposed Combination is not likely to result in competition foreclosure in any of these markets. Additionally, DSM’s largest customers of beta-carotene, vitamins A, B5 and B6 are not competitors of Firmenich and appear to be manufacturers/sellers of fast-moving consumer goods, pharmaceuticals and other industries. Further, DSM’s vitamins sold in India are dry products, while Firmenich’s favours are predominantly in liquid form, and as per Parties’ submissions being in different forms in which these are sold, dry-powder ingredients and liquid flavours are difficult to combine due to various complexities and challenges.

63. 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 any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

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

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

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