Notice given by Mahindra and Mahindra Limited, Participatie Maatschappij Buitenland B.V and HZPC Holland B.V. — Combination C-2014/05/178
- Case No.C-2014/05/178
Ratio decidendi
The rule this decision rests on
The Commission may approve a notified combination under section 31(1) where the parties have no horizontal overlap in the relevant business in India, since the acquirer's Indian operations do not compete with the target group's operations, which lie outside India. Where the market for the relevant product in India is largely unorganised with a wide spectrum of players, that structure weighs against finding an appreciable adverse effect on competition, and the combination is to be assessed on that basis under the factors in section 20(4). Where that assessment shows the combination is not likely to cause an appreciable adverse effect on competition in India, the Commission approves it under section 31(1).
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. On 23rd May 2014, 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 (“Act”) given by Mahindra and Mahindra Limited (hereinafter referred to as “M&M”), Participatie Maatschappij Buitenland B.V (hereinafter referred to as “PMB”) and HZPC Holland B.V. (hereinafter referred to as “HZPC”). (M&M, PMB and HZPC are collectively referred to as “Parties”).
2. The proposed combination relates to acquisition of forty per cent shares of Mahindra Investments (International) Private Limited (hereinafter referred to as “MIIPL”), a subsidiary of M&M by PMB, pursuant to the Share Subscription and Shareholders Agreement among M&M, PMB, MIIPL and HZPC on 23rd April, 2014. As stated in the notice, MIIPL would operate as a joint venture company wherein M&M and PMB would have stakes in the ratio of 60:40 respectively.
[ 3. In terms of Regulation 14 of Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (hereinafter referred to as “Combination Regulations”), vide letter dated 30th May 2014, the Parties were required to remove certain defects and COMPETITION COMMISSION OF INDIA Fair Competition For Greater Good provide information/document(s) latest by 9th June, 2014. The Parties filed their reply on 10th June, 2014 after seeking extension in this regard.
4. M&M is primarily engaged in the automobile business. It is also inter-alia present in agri-business, IT, consulting services. In the agribusiness, M&M is inter-alia engaged in the business of seed potato, edible oils etc. In the seed potato segment, M&M is mainly involved in the production and marketing of seed potato/mini tubers from tissue culture, in India. As stated, MIIPL is a subsidiary of M&M which is engaged in the seed potato business
5. PMB is a subsidiary of HZPC and is stated to be the holding company for the foreign subsidiaries of HZPC. HZPC, a Netherlands based company, is inter-alia engaged in the production, distribution and selling of seed potato.
6. It is observed that M&M produces and sells seed potato in India while HZPC is engaged in the business of seed potato across the world except in India. Accordingly, there is no horizontal overlap between them in their operations related to the seed potato business in India. Further, the seed potato market in India is largely unorganised with presence of wide spectrum of players.
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 assessment of the proposed combination on the basis of factors stated in sub-section (4) of section 20 of the Act, 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 same under sub-section (1) of section 31 of the Act.
8. This approval is without prejudice to any other legal/statutory obligations as applicable.
9. This order shall stand revoked if, at any time, the information provided by the parties is found to be incorrect.
COMPETITION COMMISSION OF INDIA Fair Competition For Greater Good
10. The Secretary is directed to communicate to the parties accordingly.
(Ashok Chawla) Chairperson (M.L. Tayal) Member (S.L. Bunker) Member (Sudhir Mital) Member (Augustine Peter) Member
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