M/s Reliance Retail Ventures Limited — Combination C-2023/02/1000

Notice under Section 6(2) of the Competition Act, 2002, filed by Reliance Retail Ventures Limited CORAM: Ms. Sangeeta Verma Acting Chairperson Mr. Bhagwant Singh Bishnoi Member

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

1. On 3rd February, 2023, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act), given by Reliance Retail Ventures Limited (Acquirer) regarding its proposed acquisition of Metro Cash and Carry India Private Limited (MCCIPL). In relation to the Proposed Combination, the Acquirer has entered into a Sale and Purchase Agreement with METRO Cash & Carry International GmbH and METRO Dienstleistungs-Holding GmbH.

2. In terms of Regulations 14(3) of the Combination Regulations, the Commission, vide communication dated 16th February, 2023, sought certain information and clarifications regarding, inter alia, activities of the Parties, market presence, etc. In response, the Acquirer submitted their written submission on 3rd March, 2023.

3. The Proposed Combination contemplates 100% acquisition of the wholesale cash and carry infrastructure of MCCIPL, which currently operates 31 wholesale distribution centers in different locations.

4. The Acquirer, a subsidiary of Reliance Industries Limited (RIL), is the holding company of the retail and wholesale businesses under the RIL Group in India. The Acquirer, through its subsidiaries and affiliates, is engaged in retail and wholesale of products across categories such as food & groceries, durable goods, apparel & footwear and pharmaceuticals. The RIL group, through its group entities, is engaged in hydrocarbon exploration and production; petroleum refining and marketing; petrochemicals; retail; and media and digital services.

5. MCCIPL is engaged in the business of cash and carry wholesale trading in India. It currently operates wholesale distribution centers at 31 localities under the brand ‘METRO Wholesale’. The core customers of MCCIPL include small retailers and kirana stores, hotels, restaurants & caterers, SMEs, offices, etc. Only business customers are allowed to purchase products at the stores of MCCIPL on a membership basis. All these customers are duly registered with a customer registration card. MCCIPL does not have any downstream affiliates and it does not operate any warehouse. It avails warehousing services from third party service providers. Metro AG, is the parent company of METRO Cash & Carry International GmbH and METRO Dienstleistungs-Holding GmbH and is also the ultimate holding company of MCCIPL.

6. The Proposed Combination primarily concerns wholesale (B2B) and retail (B2C) trade of goods in India, specifically in the narrower product segments for food & groceries; apparel & footwear and durable goods. As per the information provided in the notice, it is observed that the combined market position of the parties in the wholesale (B2B) segment and the said narrower segments are not significant. It is further observed that the business activities of the parties are different from each other. While the Acquirer Group is currently not operating any store in B2B cash and carry format, the activities of MCCIPL is stated to be limited to B2B cash and carry sales. Nevertheless, the Acquirer Group may use the infrastructure of MCCIPL to engage in B2C sales. However, even in such a scenario, the proposed combination does not increase concentration in any significant manner. In view of these, the Proposed Combination does not appear to give rise to any competition concern.

7. 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. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

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

9. 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.

10. The Secretary is directed to communicate to the Acquirer, accordingly.