9 January, 2018
CCI approves the acquisition of shares of DCCDL by Reco Diamond22
On November 3, 2017, CCI approved the acquisition of 33.34% of the total equity shares of Diamond and DLF Cyber City Developers Limited (‘ DCCDL’) held by Rajdhani Investments & Agencies Private Limited, Buland Consultants and Investments Private Limited and Sidhant Housing and Development Company by Reco Diamond Private Limited (‘Reco Diamond/Acquirer’; together with DCCDL referred to as ‘Parties’) (‘Proposed Combination’).
DCCDL, incorporated in India is a subsidiary of DLF Limited (‘ DLF’), which is the holding company of the DLF group of companies. DCCDL, along with its subsidiaries, is engaged in construction, development and leasing of commercial properties in India. Reco Diamond, on the other hand, is incorporated as a private limited company in Singapore and is a wholly owned subsidiary of Recosia Private Ltd, which in turn, is a wholly owned subsidiary of GIC (Realty) Pte Ltd (‘ GIC Realty’). GIC Realty, incorporated as a private company with limited liability under the laws of Singapore, holds real estate investments made on behalf of the Government of Singapore.
CCI considered the market for leasing of commercial real estate as the relevant product market and noted that the activities of DCCDL and those of the portfolio companies of GIC Realty overlap in the cities of Delhi, Gurgaon, Chennai, and Hyderabad. It held that the Proposed Combination is unlikely to cause an appreciable adverse effect on competition in any of the potential markets and thus, decided to leave the exact delineation of relevant market open. CCI further noted that the overlaps between the Parties in terms of current inventory and projects under construction are limited and the Proposed Combination is unlikely to change the competition dynamics in the real estate market and approved the Proposed Combination.
CCI approves the acquisition of Tata CMB by Airtel23
On November 16, 2017, CCI approved the acquisition of 100% of the consumer mobile business of Tata Teleservices Limited (‘TTSL ’) and Tata Teleservices (Maharashtra) Limited (‘TTML ’) (‘Tata CMB ’) by Bharti Airtel Limited (‘Airtel ’) (Tata CMB together with Airtel referred to as the ‘Parties ’) (‘Proposed Combination ’).
Airtel, a part of Bharti Enterprises group (‘Bharti Group ’), is a publicly traded global telecommunications corporation while TTSL , a part of the Tata Group, is a telecom service provider in a number of telecom circles in India. TTML is an associate company of TTSL and provides telecom service in Maharashtra.
CCI opined that the concerned relevant product market of retail mobile telephony services can be classified on the basis of various criteria such as type of service and customer, but in view of the Proposed Combination not likely to result in appreciable adverse effect on competition, it left the exact determination of the relevant product market open. CCI held the geographical market to be the 19 telecom circles where the activities of the Parties overlapped.
In its competition assessment, CCI was concerned that the telecom market is highly concentrated with high Herfindahl-Hirschman Index (‘HHI ’) figures and that the change in HHI post the Proposed Combination would also be significant in many of the overlapping circles. However, in view of the limited product offering of Tata CMB , negligible diversion ratio from Airtel to Tata CMB , and the steady decline in the market share of Tata CMB , CCI observed that Tata CMB neither seems to be a close nor an effective competitor to Airtel going forward. It further noted that spectrum holding is fairly distributed among the Telecom Service Provider (‘TSPs ’) in the overlapping circles and there is a significant quantity of unsold spectrum in each telecom circle which would likely obviate any access issues. CCI also took into account the significant constraint exerted from the buyer side by virtue of multi-SIM ing, ease of substitution due to the option of mobile number portability, and significant churn rates, and that there would be five TSP s in all the telecom circles post the Proposed Combination. Having regard to the fact that the competitors were in a position to exercise adequate competitive constraints on the Parties, CCI held the Proposed Combination not likely to raise any substantial competition concerns, and therefore, approved it under Section 31(1) of the Act.
CCI approves the acquisition of shares of Indus by VIL Shareholders24
On November 16, 2017, CCI approved the acquisition of equity shares of Indus Towers Limited (‘Indus ’) by: (i) Al-Amin Investments Ltd.; (ii) Asian Telecommunication Investments (Mauritius) Ltd.; (iii) CCII (Mauritius) Inc; (iv) Euro Pacific Securities Ltd.; (v) Vodafone Telecommunications (India) Ltd.; (vi) Mobilvest; (vii) Prime Metals Ltd.; (viii) Trans Crystal Ltd.; (ix) Omega Telecom Holdings Private Limited; (x) Telecom Investments India Private Limited; (xi) Jaykay Finholding (India) Private Limited; and (xii) Usha Martin Telematics Limited (‘VIL Shareholders /Acquirers ’). The acquisition of shares by the Acquirers in Indus was proposed to be pro rata to their shareholding in Vodafone India Limited (‘VIL ’) (‘Proposed Combination ’).
CCI noted that the Acquirers are shareholders of VIL and wholly owned indirect subsidiaries of Vodafone Group Plc (‘Vodafone ’), and that they do not hold interests in any other company. VIL is a licensed telecom service provider (‘TSP ’) and provides a range of telecommunication services in India. Indus, on the other hand, is a joint venture inter alia between the entities of Bharti Infratel Limited, VIL , and Idea Cellular Limited (‘Idea ’), and is engaged in the provision of passive telecommunications infrastructure to TSP s in 15 telecom circles in India.
Given that the Proposed Combination merely envisaged exit of VIL from Indus Towers and its replacement with the VIL Shareholders, CCI opined that the ultimate control of Indus is not undergoing any change. In view of the approved merger of telecommunication services of VIL and Idea, CCI noted that VIL Shareholders will, however, continue to exercise joint control in Indus along with other shareholders of Indus. Despite that, CCI observed that both Idea and Vodafone have insignificant presence in the passive infrastructure market with less than five percent market share in terms of standalone towers and/ or number of tenancies. Having said so, it also noted that competition assessment would not change significantly even if Idea’s or VIL ’s share in towers/tenancies of Indus is considered. Considering this, CCI held the Proposed Combination unlikely to result in an appreciable adverse effect in market for provision of passive
infrastructure services through telecom towers in India, and thus approved it.
21 Reference Case No. 04 of 2014.
22 Combination Registration No. C-2017/09/527.
23 Combination Registration No. C-2017/10/531.
24 Combination Registration No. C-2017/10/532.
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
