New Delhi: The Competition Commission of India (CCI) has cleared pharmaceutical firm Sanofi-Synthelabo's proposed stake buy in an Apollo group arm, saying the deal does not raise any concerns related to unfair business practices.
Under the proposed deal, Sanofi-Synthelabo would acquire a 20 per cent stake and exercise certain rights in relation to management of Apollo Sugar Clinics Ltd (ASCL) - a subsidiary of Apollo Health and Lifestyle.
After the deal, ASCL, which provides diagnosis and treatment to diabetic patients, would be jointly controlled by Sanofi-Synthelabo and Apollo Health & Lifestyle.
As per the agreement, Sanofi-Synthelabo would also have an option to increase its shareholding in ASCL to 26 per cent which can be exercised during a certain period of time.
Further, Apollo group would transfer its operational clinics to ASCL under the proposed deal.
In an order released on Wednesday, the competition watchdog said "the proposed combination is not likely to have an appreciable adverse effect on competition in India".
CCI observed that Sanofi-Synthelabo and ASCL operate at different levels of the supply chain in the healthcare industry in the country and "there is no horizontal overlap between the business of Sanofi and ASCL".
"The proposed combination, would not, therefore, result in the removal of any competitor from the market."
CCI also noted that "the vertical relationship between Sanofi and ASCL is complementary and will enable them to harness their respective expertise to provide out-patient health care services for diabetes".
The agreements had been entered on June 25 this year, following which Sanofi-Synthelabo had filed a notice with CCI seeking its approval on the deal.