This Article is From Jul 01, 2015

CCI Approves Crompton Greaves Deal After Modifications

New Delhi: Fair trade regulator CCI has cleared Advent and Temasek's Rs 2,000 crore deal to buy stake in Crompton Greaves Consumer Electricals after the parties agreed to reduce the tenure of non-compete restrictions proposed in the transaction.

Under the proposed combination, Advent and Temasek would snap up 34.37 per cent stake in Crompton Greaves Consumer Electricals from Avantha Holdings.

Later, the acquirers would make an open offer to purchase additional 26 per cent shareholding in the target company.

Singapore-based MacRitchie, a subsidiary of Temasek Holdings (Pvt) Ltd, would be acquiring the stake along with Advent -- which would be buying the shares through two Cyprus-incorporated special purpose vehicles Amalfiaco and Nirsinia.

Before giving its green signal, Competition Commission of India (CCI) had sought clarification on the provision of five- year non-compete restrictions in the Share Purchase Agreement (SPA).

In its order, the Commission said it accepted the modification proposed by the acquirers to reduce the duration of non-compete obligation to three years.

According to CCI, neither of them acquirer produce or provide similar or identical or substitutable products or services to those forming part of consumer products business of target company.

"... as stated in the notice, there is also no vertical relationship between the consumer products business of the target (company) and the acquirers and/or the operating portfolio companies of the acquirers in India," the regulator said in its order, dated June 12 and released on Wednesday.