9 July, 2019
On April 4, 2019, CCI approved the acquisition of up to 66.15% of the equity share capital of Mindtree Limited (‘Mindtree’) by Larsen and Toubro Limited (‘L&T’). [1] The proposed acquisition was to be given effect via acquisition of:
(i) 20.15% of the equity share capital of Mindtree collectively from Coffee Day Enterprises Limited, Coffee Day Trading Limited and Mr. V.G. Siddhartha with the intention to acquire control over Mindtree;
(ii) up to 31% of the total equity share capital of Mindtree through an open offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; and
(iii) up to 15% of the equity share capital of Mindtree by way of stock exchange purchases.
L&T is the holding company of its subsidiaries Larsen and Toubro Infotech Limited (‘LTI’) and Larsen and Toubro Technology Services Limited (‘LTTS’) which offer IT Services and IT enabled services. Mindtree is engaged in the business of providing IT and IT enabled services (‘ITES’) including IT consulting, digital services, engineering research and development services and cloud services.
CCI noted that both L&T and MindTree overlapped in the IT and ITES segments. CCI approved the transaction unconditionally since the parties’ combined market share in IT and ITES was minimal (i.e. 0 to 5%) and they faced strong competition from large players like Tata Consultancy Services, Wipro, Infosys, HCL and Tech Mahindra.
[1] Combination Registration No. C-2019/03/652.
For further information, please contact:
Zia Mody, Partner, AZB & Partners
zia.mody@azbpartners.com
