17 May, 2019
On March 8, 2019, CCI approved the proposed acquisition of the automobile component business of Fiat Chrysler Automobile N.V. (‘Fiat’), housed in Magneti Marelli Italy (‘MM Italy’), Automotive Lighting Reutlingen GmbH (‘AL Germany’), Magneti Marelli Holding USA LLC (‘MM US’) and their respective subsidiaries (‘Fiat Entities’), by CK Holdings Company Limited (‘CK Holdings’), (‘Proposed Combination’).[1] The Proposed Combination had been structured as an acquisition of the entire share capital of MM Italy, AL Germany and MM US by CK Holdings and notified to CCI further to the execution of a Share Purchase Agreement between CK Holdings, Fiat and MM Italy dated October 20, 2018 (‘SPA’). CK Holdings and Fiat Entities have been collectively referred to as ‘Parties’.
CK Holdings is present in India through Calsonic Kansei Motherson Auto Products Limited (‘CK Motherson’), which is a joint venture between Calsonic Kansei Corporation and the Samvardhana Motherson Group. CK Holdings is wholly held and controlled by investment funds advised or managed by affiliates of KKR and Co. (‘KKR’) (a global investment firm). In addition to CK Motherson, KKR also holds shares/control over certain enterprises engaged in automotive components business in India namely, LS Auto, LS Automobiles India Private Limited and Tekfor. On the other hand, the Fiat Entities are engaged in the manufacture and sale of automotive components and are present in India through a wholly owned subsidiary of MM Italy namely, Magneti Marelli India Private Limited and also through certain joint ventures.
Therefore, activities of Parties to the Proposed Combination relate to the automotive components business, which may be segmented into broad categories, which can further be sub-segmented into various modules and/or components. These modules/components can be classified on the basis of the type of vehicles viz., light vehicles, two wheelers etc., for which automotive components are manufactured. CCI noted that while the Parties overlap in five broad categories in India i.e., body electronics, heating, ventilation and air conditioning (‘HVAC’), human machine interface electronics (‘HMI’), lighting, and powertrain; there are no market facing overlaps at component/module level.
CCI also considered the following potential vertical relationships in India at the module level: (i) Body Control Module (‘BCM’) components and BCM modules emanating from upstream supply of these components by CK Motherson and the downstream manufacture of BCM modules by Fiat Entities; and (ii) headlamps and front end modules emanating from upstream sale of headlamps by Fiat Entities and the downstream sale of front end modules by CK Motherson. However, considering that CK Holdings is not engaged in any market facing activities in relation to the concerned products, CCI concluded that the Proposed Combination is unlikely to result in an appreciable adverse effect on competition (‘AAEC’).
Keeping the above mentioned factors in mind, CCI approved the Proposed Combination.
[1] Combination Registration No. C-2019/01/639
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
