21 July, 2015
On May 7, 2015, CCI approved the acquisition of worldwide building heating, ventilation and air conditioning (‘HVAC’) business of Hitachi Appliances, Inc. (‘HA’) by Johnson Controls Inc. (‘JCI’) through Johnson Controls Air Conditioning Holding (UK) Ltd. (‘JCAC’). The notice was filed pursuant to a Master Transactions Agreement (‘MTA’) entered into between JCI, Hitachi Ltd. (‘Hitachi’), and HA on January 21, 2015. CCI observed that JCAC would become a global 60:40 joint venture company between JCI and HA pursuant to the proposed combination.
JCI is a global multi-industry technology company engaged inter alia in the business of building HVAC product controls and security systems for buildings, batteries and interior sys- tems for automobiles etc. JCI has an indirect presence in India through various entities in the building efficiency and automotive segments. HA provides room air conditioning (‘RAC’), as well as variable refrigerant flow systems (‘VRF’) systems, chillers and heaters for buildings and air conditioners for commercial use as well as home appliances.
CCI noted that the transaction predominantly related to the HVAC market in India, which can be divided into three main segments including chillers, VRF systems and RAC. CCI noted that while both the parties are players in the HVAC systems in India, one party had an insignifi- cant market share in the particular HVAC segment in which the other was present. Post merger, various other domestic and global players would continue to supply these products in India. Accordingly, CCI observed that the horizontal overlap between the parties was unlikely to cause any AAEC in India.
CCI also observed that JCI and HA’s presence in the ancillary HVAC products was not significant enough to give rise to any concerns of vertical foreclosure. Accordingly, the CCI determined that the proposed transaction was unlikely to cause any AAEC in India and ap- proved the same.
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
Shuva Mandal, Partner, AZB & Partners
shuva.mandal@azbpartners.com
