5 July, 2017
CCI Approves the Merger of British American Tobacco plc and Reynolds American, Inc.
On March 30, 2017, CCI approved the merger of British American Tobacco plc (‘BAT’) and Reyn- olds American Inc. (‘RAI’).
BAT and RAI, incorporated in England and Wales and the United States respectively, are both involved in the manufacturing and marketing of cigarettes and other tobacco products. BAT has presence in India through its indirect non-controlling interest in ITC Limited and VST Industries Limited, however, RAI does not have direct/indirect operations in India. Given the absence of business presence of RAI in India, CCI concluded that the proposed merger does not lead to horizontal and vertical overlaps in India, and therefore, not likely to have an AAEC in India. CCI thus approved the merger under Section 31(1) of the Act.
CCI Approved the Acquisition of Ericsson India Pvt. Ltd.’s Electronic Manufacturing Services by Jabil Circuit India Pvt. Ltd.
On March 30, 2017, CCI approved the acquisition of Ericsson India Pvt. Ltd.’s (‘Ericsson India’) Electronic Manufacturing Services (‘EMS’) by Jabil Circuit India Pvt. Ltd. (‘Jabil India’) as a go- ing concern.
CCI noted that both Jabil India and Ericsson India are engaged in EMS; however, the EMS provided by Ericsson India are in-house/captive i.e., there are no external customers of Erics- son India. CCI further noted that the presence of Eriksson India and Jabil India in EMS or any of the sub-segments of EMS is not substantial and there are several other larger players operat- ing in the EMS business. Regarding the vertical overlaps, it stated that Ericsson India produces radio base stations and provides services for radio base station to telecom operators in India while Jabil India manufacturers radio modules and mini links radio, which are input or raw materials for radio base stations. However, given the insignificant presence of Eriksson India and Jabil India in any of the vertical segments, the CCI approved the proposed combination as it would not raise any AAEC in India.
CCI Approved the Acquisition of 26% Stake in Future Speciality Retail Limited by Beacon Trusteeship Limited and a Transfer of a Section of Apparel Marketing Business from Future Lifestyle Fashions Limited to Future Speciality Retail Limited
On March 16, 2017, CCI approved the acquisition of compulsorily convertible preference shares (convertible to 26% stake on a fully diluted basis) in Future Speciality Retail Limited (‘FSRL’) by Beacon Trusteeship Limited (‘Beacon’) and a transfer of a section of apparel marketing business operated under the brand name Lee Cooper from Future Lifestyle Fashions Limited (‘FLFL’) to FSRL. The notice was jointly given by FSRPL CCPS Trust (‘Trust’) (acting through its trustee, Beacon) and FLFL.
FSRL was noted to be an indirect wholly owned subsidiary of FLFL, through Future Trendz Limited, which is a direct wholly owned subsidiary of FLFL. CCI noted that Beacon and the three beneficiaries in Beacon i.e., Barclays Bank PLC (India Branch), Nomura Capital (India) Private Limited and Adani Capital private Limited are engaged in the business of trusteeship services, corporate & investment banking, lending and making investments, and fund based activities, respectively. On the other hand, FLFL was noted to be engaged in the business of clothing, foot- wear, and leather articles. Considering that there were no horizontal and vertical overlaps, di- rectly or indirectly, between Trust and FLFL, the CCI unconditionally approved the proposed combination.
CCI Approves Acquisition of 14.89% Shareholding in Centrum Direct Limited by NYLIM Jacob Ballas Indian Holdings IV and Jacob Ballas Capital India Private Limited
On March 16, 2017, CCI approved the acquisition of 14.89% shareholding in Centrum Direct Limited (‘Centrum’) by NYLIM Jacob Ballas Indian Holdings IV (‘Holdings IV’) and Jacob Bal- las Capital India Private Limited (‘Jacob Ballas’) (Holdings IV and Jacob Ballas are collectively referred to as the ‘Acquirers’). The proposed combination had been notified to CCI as the Ac- quirers had certain affirmative rights which they would continue to hold until the time the Ac- quirers held certain shares in Centrum. Such affirmative rights were in the nature of approvals required from the Acquirers by Centrum and its subsidiaries for matters pertaining to: (i) ac- quisitions; (ii) for entering into a new line of business or diversification of the existing one; (iii) for appointment and removal of key personnel; (iv) for the appointment of independent direc- tors on the board of Centrum; and (v) for the creation of any new subsidiaries or joint ventures.
Holdings IV, which is headquartered in Mauritius, is owned and controlled by New York Life Insurance Company (‘NYLIC’) and is engaged in equity or equity related investments in companies that are based in or have significant operations in India. NYLIC is a life insurance company headquartered in New York. It offers life and health insurance, long-term care, annuities, pension products, mutual funds, and other investment advisory services. Jacob Ballas, incorporated under the Companies Act, 1956 (‘Companies Act’), is engaged in offering services such as, financial advisory and investment consultancy for acquisition, holding, selling and un- derwriting of shares, debentures, bonds, and corporate finance.
Centrum, incorporated under the Companies Act, is a wholly owned subsidiary of Cen- trum Retail Services India Limited, which in turn is a subsidiary of Centrum Capital Limited. Centrum is engaged in the provision of foreign exchange services.
CCI analyzed the horizontal overlap and noted that the Acquirers and Centrum do not pro- vide any similar, identical or substitutable products or services in India, either directly or indi- rectly. Further, none of the portfolio companies of NYLIC, wherein NYLIC exercises control, are engaged in providing services that are similar to that offered by Centrum. CCI further observed that there is no vertical relationship between the Acquirers and Centrum or between Centrum and any of the portfolio companies of NYLIC in India in the relevant market. On this basis, CCI decided that the proposed combination did not raise any AAEC and approved the same.
16 Case Nos. 05, 07, 37 and 44 of 2013.
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
