Notice given by Ruchi Soya Industries Limited — Combination C-2014/03/159
- Case No.C-2014/03/159
Ratio decidendi
The rule this decision rests on
A combination notified under section 6(2) of the Competition Act, 2002 may be approved under section 31(1) where the Commission, on the notice and the facts on record, assessing the combination against the factors in section 20(4), forms the opinion that it is not likely to have an appreciable adverse effect on competition in India. Here, that opinion rested on the acquirer's market share in the relevant refined oil and vanaspati segments not increasing in any significant manner, and on the fact that roughly half of domestic edible oil demand is met through imports. An approval so granted is conditional on the accuracy of the information furnished by the acquirer, and it stands revoked if that information is found to be incorrect at any time.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1. On 18th March, 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 Ruchi Soya Industries Limited (‘Acquirer’ or ‘RSIL’). 2. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to transaction of business relating to combinations) Regulations, 2011 (‘Combination Regulations’), vide letter dated 26th March, 2014, the Acquirer was required to remove defects and furnish certain information/document(s) regarding the notice, by 1st April, 2014. However, the Acquirer filed its response on 2nd April, 2014, after seeking extension of one day. 3. The proposed combination relates to the acquisition of the Oil Refining Business (‘ORB’) of Ruchi Infrastructure Limited (‘RIL’) by RSIL, as a going concern, on a slump sale basis, pursuant to terms and conditions as stated in the Business Transfer Agreement (‘BTA’), dated 7th March, 2014. 4. The proposed combination falls under Section 5(a) of the Act. 5. The Acquirer, a listed company in India is engaged inter alia in the business of developing and processing soybean seeds, manufacturing of crude edible oil and oil seed extractions, refining, marketing and supplying of edible oil.
6. RIL, also a listed company, is primarily engaged in the business of providing storage infrastructure of liquid commodities, warehousing facilities for storage of agricultural commodities such as wheat, soybean etc. It runs an edible oil refinery plant for manufacture of refined oil and vanaspati situated at Kakinada, Andhra Pradesh, which is stated to be acquired by RSIL.
COMPETITION COMMISSION OF INDIA Fair Competition For Greater Good
7. As per the details provided in the notice, the promoters of RIL i.e. Shahra Group hold 54.46 per cent stake in RIL. Shahra group also holds 55.86 per cent stake in RSIL.
8. India is one of the largest edible oil markets in the world. As per information available in public domain around fifty percent of the domestic demand of edible oils in India is met through imports. Moreover, the market share of RSIL in both the refined oil and vanaspati segment would not increase in any significant manner due to the proposed combination.
9. 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 proposed combination on the basis of the 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. 10. This order shall stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect. 11. The Secretary is directed to communicate to the Acquirer accordingly.
(Ashok Chawla) Chairperson (Geeta Gouri) Member (Anurag Goel) Member (S.L. Bunker) Member
COMPETITION COMMISSION OF INDIA Fair Competition For Greater Good (Sudhir Mittal) Member (Augustine Peter) Member
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