Notice given by Anant Investments, — Combination C-2013/10/137
- Case No.C-2013/10/137
Ratio decidendi
The rule this decision rests on
A combination does not have an appreciable adverse effect on competition under Section 31(1) where the acquirer's existing interests in companies at other levels of the production chain bear only an insignificant relationship to the target's business, and where the target's dealings with those companies are negligible in value and quantum. Where the market contains a relatively large number of other pharmaceutical companies, contract research organisations and hospitals offering similar products or services, a proposed combination is not likely to cause an appreciable adverse effect on competition in India. Approval of a combination may be made conditional on the accuracy of the information furnished by the acquirer, such that the approval stands revoked if that information is found to be incorrect, and it is without prejudice to any other legal or statutory obligation.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. On 30th October 2013, the Competition Commission of India (hereinafter referred to as the “Commission”) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (hereinafter referred to as the “Act”) given by Anant Investments (hereinafter referred to as the “Acquirer”).
2. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, vide letter dated 4th November 2013, the Acquirer was required to remove certain defects and provide information/document (s) latest by 11th November 2013. After seeking extension of time, the Acquirer filed its reply on 12th November 2013.
3. The proposed combination relates to acquisition of shares of Global Health Private Limited (hereinafter referred to as “GHPL”) by the Acquirer pursuant to the execution of the following agreements on 29th October 2013:
(a) Share Purchase Agreement between the Acquirer and GL Asia Mauritius II Limited, an indirect subsidiary of Avenue Asia Special Situations Fund IV L.P., a fund managed by Avenue Asia Capital Management L.P, for acquisition of equity shares representing 26.8 percent of the issued equity share capital of GHPL.
COMPETITION COMMISSION OF INDIA For Greater Good (b) Subscription Agreement between the Acquirer, Dr. Naresh Trehan and Dr. Naresh Trehan & Associates Health Services Private Limited and GHPL for acquisition of convertible preference shares representing 0.95 percent of the shareholding of GHPL, on a fully diluted basis; and (c) Shareholders Agreement between the Acquirer, Dr. Naresh Trehan and Dr. Naresh Trehan & Associates Health Services Private Limited and GHPL for regulating the relationship of the Acquirer and the promoters in relation to GHPL and its subsidiaries from time to time.
4. The proposed combination falls under Section 5 of the Act.
5. The Acquirer, incorporated in Mauritius, is a special purpose acquisition vehicle, owned and controlled by funds managed by the Carlyle Group (hereinafter referred to as “Carlyle”), a global alternative asset manager making investments in different sectors across the world. Carlyle is stated to invest across four segments, namely, corporate private equity; global market strategies; real assets; and solutions in Africa, Asia, Australia, Europe, the Middle East, North America and South America.
6. GHPL, a company incorporated in India, is stated to be engaged in the business of establishing, owning and managing hospitals to provide healthcare, pathology and other medical services. GHPL owns, manages and operates the super-speciality hospital ‘Medanta-the Medicity’ located in Gurgaon. GHPL also owns and operates ‘Medanta Mediclinic’, a multi-super speciality OPD clinic and day-care facility set up as an extension of the hospital in Gurgaon. In addition, through its subsidiary, Medanta Duke Research Institute Private Limited, GHPL is engaged in R&D activities related to drugs, surgery, medical devices and equipment.
COMPETITION COMMISSION OF INDIA For Greater Good
7. As per the details provided in the notice, it is observed that the funds managed by Carlyle do not have investment in any company that is engaged in the businesses of providing hospital services in India. However, Carlyle has stake in two companies operating in the Indian healthcare sector, namely, Claris LifeSciences Limited (‘Claris’), a pharmaceutical company stated to manufacture and market lifesaving products for treating critical illness; and Pharmaceutical Product Development Inc. (‘PPD’), a contract research organisation (CRO) stated to provide expertise in clinical trial development, management, and post approval services.
8. It is observed that GHPL had purchased certain products manufactured by Claris; however, the value and quantum of the products procured are relatively negligible. Though the aforesaid stakes of Carlyle in Claris and PPD exhibit certain degree of relationship between the business of the said companies and GHPL, at different levels of the production chain, such relationship is insignificant. Further, considering the presence of other relatively large number of pharmaceutical companies, CROs and hospitals providing similar products/services, the proposed combination is not likely to give rise to any adverse effect on competition in India.
9. Considering the facts on record and the details provided in the notice, the Commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India and, therefore, the Commission hereby approves the proposed combination under sub-section (1) of Section 31 of the Act.
10. This approval is without prejudice to any other legal/statutory obligation as applicable.
11. This order shall stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect.
COMPETITION COMMISSION OF INDIA For Greater Good
12. The Secretary is directed to communicate to the Acquirer accordingly.
-sd- (Ashok Chawla) Chairperson
-sd- (Geeta Gouri) Member
-sd- (Anurag Goel) Member
-sd- (M.L. Tayal) Member
-sd- (S.N. Dhingra) Member
-sd- (S.L. Bunker) Member
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