Yanmar Investment Partnership (Singapore) Pte. Ltd., Singapore — Combination C-2017/01/473
- Case No.C-2017/01/473
Ratio decidendi
The rule this decision rests on
Where an acquirer is an investment-holding vehicle with no business operations or investments in any other entity, and there are no horizontal or vertical overlaps between the parties, a combination is not likely to cause an appreciable adverse effect on competition in India. Where the acquirer's group already exercises joint control over the target and the combination only increases that group's shareholding, the combination is unlikely to alter the competitive landscape, and the Commission may leave the relevant market undefined. Where, on the facts on record and the notice, and having assessed the combination under the factors in section 20(4), the Commission is of the opinion that a combination is not likely to have an appreciable adverse effect on competition, it may approve the combination under section 31(1).
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Notice under Section 6 (2) of the Competition Act, 2002 given by Yanmar Investment Partnership (Singapore) Pte Ltd.
CORAM:
Mr.Devender Kumar Sikri Chairperson
Mr. S.L.Bunker Member
Mr. Sudhir Mital Member
Mr. Augustine Peter Member Mr. U.C. Nahta Member
Mr. G.P. Mittal Member
Legal Representative: Chandhiok & Associates, New Delhi
Order under Section 31(1) of the Competition Act, 2002
1. On 12.01.2017, 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”) filed by Yanmar Investment Partnership (Singapore) Pte Ltd. (“Yanmar”/“Acquirer”)
COMPETITION COMMISSION OF INDIA For Greater Good
2. The notice was filed pursuant to the execution of Share Purchase Agreement (“SPA”) dated 22.12.2016 entered into between Acquirer and Sellers. (Hereinafter Yanmar, ITL & Sellers are collectively referred to as “Parties”).
3. The proposed combination envisages Yanmar acquiring 17.75% shares of International Tractors Limited (“ITL”/“Target”) from the Blackstone Group (“Sellers”). (“Proposed Combination”). Yanmar Holdings Co. Ltd. (“Yanmar Group”) currently holds 12.61% in ITL through Yanmar Asia (Singapore) Corporation Pte. Ltd. (“Yanmar Pte”). Post-combination, Yanmar Group would hold approx. 30.36% of the share capital of ITL.
4. The Proposed Combination has been filed under sub-section 2 of Section 6 read with Section 5(a)(i)(A) of the Act.
5. Yanmar is an investment-holding vehicle incorporated for the purposes of the Proposed Combination. It does not currently have any business operations as it was recently incorporated on 18.11.2016 in Singapore. It is a subsidiary of Yanmar Group, which is engaged in the manufacture and sale of engines, tractors and other agricultural equipment. The ultimate parent company, Yanmar Holdings Co. Ltd. is a private company headquartered in Osaka, Japan. In India, Yanmar Group operates through Yanmar India Pvt. Limited(engaged in the business of industrial diesel engines), Yanmar Coromandel Agri Solutions Private Limited (engaged in the business of agri-solutions), Vetus India (engaged in the business of marine related accessories) and C&S Himoinsa Private Limited (engaged in the business of gensets).
6. ITL is engaged in manufacturing and sale of tractors and parts thereof, and trading of farm and agricultural equipment both in domestic and export markets. It is jointly controlled by Yanmar Group and presently forms a part of the Yanmar Group which, through Yanmar Pte, exercises control over it. ITL manufactures tractors under the Sonalika & Solis brands. Further, ITL also has limited sales from ancillary products which are comprised of gensets used for power generation, engines for tractors, gensets and multi utility vehicles, spare parts for tractors including products such as oil and lubricants etc. and agricultural equipment which include rice transplanters, cultivators, harvesters, disc ploughs, threshers and rotovators.
COMPETITION COMMISSION OF INDIA For Greater Good
7. The Commission observed that the Acquirer currently has no business operations or any investments in any other entity; there are no horizontal or vertical overlaps between the Parties. 8. The Commission noted that Yanmar Group already has joint control over ITL and through the Proposed Combination, is further increasing its ownership stake; accordingly, the Proposed Combination is unlikely to alter the competition landscape in India. Due to such nature of the Proposed Combination, the relevant market may be left open. 9. Considering the facts on record, 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 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 Parties is found to be incorrect. 11. The information provided by the parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act. 12. The Secretary is directed to communicate to the parties accordingly.
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