Notice given by Paris Cement Investment Holdings Limited and Lafarge India Private Limited. — Combination C-2013/06/125
- Case No.C-2013/06/125
Ratio decidendi
The rule this decision rests on
A combination under Section 5(a) of the Competition Act, 2002, consisting of a minority equity subscription by an investor whose group neither manufactures the target's product nor is vertically related to the target's business, is not likely to cause an appreciable adverse effect on competition in India. The Commission reaches that conclusion by assessing the combination against the factors in Section 20(4), and it may approve the combination under Section 31(1) on that basis. An approval granted on such a finding is conditional on the accuracy of the information furnished by the parties, and it stands revoked if that information is found to be incorrect.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. On 12th June, 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 Paris Cement Investment Holdings Limited (hereinafter referred to as “PCIHL”) and Lafarge India Private Limited (hereinafter referred to as “LIPL”) in Form I.
2. The proposed combination comprises the subscription of 14.03 percent of the equity share capital in LIPL by PCIHL. The notice was filed pursuant to the execution of an investment agreement between Financiere Lafarge, LIPL and PCHIL on 14th May, 2013. The said agreement inter alia provides that certain actions of LIPL cannot be taken without the prior written consent of PCIHL. The proposed combination falls under Section 5 (a) of the Act.
3. It has been stated in the notice that PCIHL is an investment vehicle and is an indirect wholly owned subsidiary of the partnerships that comprise Baring Asia Private Equity Fund V, a private equity fund, for which the Baring Asia Private Equity Fund V, L.P (hereinafter referred to as ‘Baring’) comprises over 99 percent of total fund commitments. Baring is in the business of making investments in the companies across a broad spectrum of industries throughout Asia.
4. LIPL is a wholly owned Indian subsidiary of Financiere Lafarge, which in turn is a subsidiary of Lafarge S.A., a company incorporated in France and engaged in the business of manufacture of building materials across different countries of the world. LIPL is engaged in the business of manufacturing diverse grades of grey cements in India.
5. As per the details provided in the notice, it is observed that neither PCIHL nor Baring or any of its portfolio companies is engaged in the business of manufacturing cement in India. Further, the business of PCIHL and Baring or any of its portfolio companies is not vertically related to the business of LIPL. Therefore, the proposed combination will not give rise to any adverse competition concern in India.
6. Considering the facts on record and the details provided in the notice given under sub-section (2) of Section 6 of the Act and the assessment of the combination after considering the relevant factors mentioned in sub-section (4) of Section 20 of the Act, the Commission is of the opinion that the combination is not likely to have appreciable adverse effect on competition in India and therefore, the Commission hereby approves the combination under sub-section (1) of Section 31 of the Act.
7. This approval is without prejudice to any other legal/statutory obligations as applicable.
8. This order shall stand revoked if, at any time, the information provided by the parties to the combination is found to be incorrect.
9. The Secretary is directed to communicate to the PCIHL and LIPL accordingly.
-sd- (Ashok Chawla) Chairman
-sd- (Anurag Goel) Member
-sd- (M.L. Tayal) Member
-sd- (S.N. Dhingra) Member
-sd- (S.L. Bunker) Member
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