M/s Berhyanda Limited, Nicosia, Cyprus — Combination C-2023/03/1007

COMPETITION COMMISSION OF INDIA

20 April 2023 Notice under Section 6(2) of the Competition Act, 2002 given by Berhyanda Limited

CORAM:

Ms. Sangeeta Verma Acting Chairperson

Mr. Bhagwant Singh Bishnoi Member Order under Section 31(1) of the Competition Act, 2002

1. On 14 March 2023, the Competition Commission of India (Commission) received a Notice under Section 6(2) of the Competition Act, 2002 (Act), given by Berhyanda Limited (Acquirer). The Notice was filed pursuant to the execution of Share Purchase Agreement (SPA) dated 26 December 2022, between the Acquirer, Jasti Property and Equity Holdings Private Limited (as the sole trustee of the Jasti Family Trust) (Seller) and Mr. Venkateswarlu Jasti (Seller Representative).

Proposed Transaction

2. The proposed transaction involves acquisition of up to 76.10 percent of the voting share capital of Suven Pharmaceuticals Limited (SPL/Target) pursuant to the SPA and the mandatory open offer (Open Offer) in compliance with the Securities and Exchange Board of India (SEBI) (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SEBI Takeover Regulations) (Proposed Transaction) (hereinafter the Acquirer and SPL are collectively referred to as the ‘Parties’). As submitted, pursuant to the Open Offer and consummation of the transactions contemplated under the SPA, the Acquirer will have sole control over SPL and the Acquirer shall become the promoter of SPL.

Advent and Relevant Advent Entities

3. The Acquirer is the wholly owned subsidiary of Berhyanda Midco Limited. Berhyanda Midco Limited is in turn the wholly owned subsidiary of Jusmiral Midco Limited which is collectively controlled by the Advent International GPE IX Funds and the Advent International GPE X Funds, which are ultimately managed by Advent International Corporation (Advent). Advent is a global private equity fund. Currently, it has invested/committed over USD 3.2 billion across 14 companies with headquarters or operations in India in sectors such as business and financial services, retail, consumer and leisure, healthcare, industrial and technology.

4. Certain portfolio companies of Advent (Advent Affiliates) considered relevant in context of the assessment of the Proposed Transaction are: (i) Cohance Lifesciences Limited (Cohance); (ii) ZCL Chemicals Limited (ZCL); (iii) Avra Laboratories Private Limited (Avra); (iv) Bharat Serums and Vaccines Limited (BSV); and (v) Industria Chimica Emiliana S.p.A (ICE).

SPL

5. SPL (which is the holding company) is a public listed company incorporated in India. It is listed on BSE Limited and the National Stock Exchange of India Limited. SPL is a bio-pharmaceutical company. It is an integrated contract development and manufacturing (CDMO) and offers its services to global pharmaceutical and agrochemical majors in their innovation endeavours. It partners with them at various stages of their molecule development and even undertakes the manufacturing of intermediates for approved molecules. Its services include custom synthesis, process R&D, scale-up and contract manufacturing of Intermediates, active pharmaceutical ingredients (API), and Finished Dosage Forms (FDFs). Casper Pharma Private Limited, a wholly owned subsidiary of SPL, manufactures oral solid and liquid medications for USA and other regulated markets. The company has a manufacturing facility in Hyderabad.

Competition Assessment

6. The Parties are present (directly and/ or through their group companies and Affiliates) in the pharmaceutical sector in India. The supply chain in the pharmaceutical sector comprises of pharmaceutical intermediates which are chemical compounds which serve as the building block for APIs; APIs which are the key/primary molecules used in the making of any drug; using APIs, pharmaceutical companies manufacture FDFs which are consumed by end-consumers. In this supply chain, recent years have seen the emergence of players who provide CDMO services for all kinds of pharmaceutical products (i.e., intermediates, APIs and FDFs).

7. Within the aforesaid pharmaceuticals sector supply chain, the Parties are operating in the broad segments of: (i) provision of CDMO services in India; and (ii) manufacturing and sale of pharmaceutical products in India. Further, within the segment of provision of CDMO services, the operating activities can be narrowed down to segments of Intermediates, API, and FDFs and within the segment of manufacturing and sale of pharmaceutical products, the operating activities can be narrowed down to segments of Intermediates, APIs, and FDFs (including pellets). The Proposed Transaction has been assessed in terms of operational dynamics of these segments or further narrower sub-segments (as applicable) in India. However, as the Proposed Transaction, for the reasons detailed hereunder, is not likely to raise concerns in any of the plausible relevant markets, the Commission decided that the question of exact delineation of relevant market(s) may be left open.

8. The activities of the Parties do not exhibit an overlap in the segment of provision of CDMO services for pharmaceutical products in India.

9. As regards the manufacturing and sale of pharmaceutical products in India, the activities of the Parties overlap in narrower segments of manufacturing and sale of pharmaceutical intermediates and manufacturing and sale of APIs. Within the segment of APIs, the activities of the Parties overlap in the narrower sub-segment of Tamsulosin API. The Commission observed that the presence of the Parties in all the overlapping segments or sub-segments is negligible to raise any appreciable adverse effect on competition (AAEC) concerns.

10. The aforesaid activities also give rise to certain vertical overlaps. The Parties’ presence in: (i) the manufacturing and sale of intermediates in India (upstream market) and the manufacturing and sale of APIs in India (downstream market); and (ii) the provision of CDMO services for intermediates in India (upstream market) and the provision of CDMO services for APIs in India (downstream market) constitute vertical overlap. However, again considering the insignificant presence of the Parties in any of the aforesaid segments, the Proposed Transaction is not likely to confer any ability or incentive to the combined entity to engage in any foreclosure strategies.

11. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Transaction based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Transaction is not likely to have any AAEC in India. Therefore, the Commission approves the Proposed Transaction under Section 31(1) of the Act.

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

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

14. The Secretary is directed to communicate to the Acquirer accordingly.