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The Competition Commission of India approves the combination arising from the Family Settlement Agreement and the brand and non-compete agreement among the ABG Family, NBG Family, JNG Family, and SVC Family. The proposed combination involves the realignment of interests, legal ownership, management, and shareholding across GILAC Group Entities and G&B Group Entities within the Godrej group. The ABG Family and NBG Family continue to control the GILAC Group Entities. The JNG Family and SVC Family continue to control the G&B Group Entities. The Commission determines that the internal reorganization does not cause an appreciable adverse effect on competition in India. The order is subject to revocation if the provided information is incorrect.
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COMPETITION COMMISSION OF INDIA Combination Registration No. C-2024/05/1146
18th June 2024
Notice under Section 6(2) of the Competition Act, 2002 jointly given by ABG Family, NBG Family, JNG Family, and SVC Family
CORAM:
Ms. Ravneet Kaur Chairperson
Ms. Sweta Kakkad Member
Mr. Deepak Anurag Member
Order under Section 31(1) of the Competition Act, 2002
On 15th May 2024, the Competition Commission of India (‘Commission’) received a Notice under Section 6(2) of the Competition Act, 2002 (‘Act’) jointly given by: (i) the ABG Family, headed by Adi Godrej and comprising of Tanya Dubash, Nisaba Godrej, Pirojsha Godrej, Aryaan Dubash, Azaar Dubash, Zoran Mehta (through his mother and natural guardian), Aidan Mehta (through her mother and natural guardian), Sasha Godrej (through her father and natural guardian), and Lana Godrej (through her father and natural guardian); (ii) the NBG Family, headed by Nadir Godrej and comprising of Rati Godrej, Burjis Godrej, Sohrab Godrej, and Hormazd Godrej; (iii) JNG Family, headed by Jamshyd Godrej and comprising of Pheroza Godrej, Navroze Godrej, and Raika Godrej (through her father and natural guardian); and (iv) SVC Family, headed by Smita Godrej Crishna and comprising of Freyan Crishna Bieri Nyrika Holkar, Kiyan Bieri (through his mother and natural guardian), Zai Bieri (through his mother and natural guardian), Arianne Holkar (through her mother and natural guardian), and Aryaman Holkar (through his mother and natural guardian) [The ABG Family, the NBG Family, the JNG Family and the SVC Family are collectively referred to as ‘Family Branches’/‘Parties’]. The Notice was filed pursuant to the Family Settlement Agreement dated 30th April 2024 (FSA), executed by the members of the Family Branches.
The proposed combination envisages realignment of interests, legal ownership, and management of various entities within the Godrej group, which is involved in an array of businesses today. Various Godrej group entities forming part of the proposed combination which are managed, controlled, and/or promoted by various members of the Family Branches, directly or indirectly through ownership or control of shareholding or management of these entities can be classified as GILAC Group Entities, and G&B Group Entities. GILAC Group Entities include (i) Godrej Industries Limited (GIL); (ii) Godrej Consumer Products Limited (GCPL); (iii) Godrej Properties Limited (GPL); (iv) Godrej Agrovet Limited (GAVL); (v) Godrej Seeds & Genetics Limited (GSGL); (vi) Innovia Multiventures Private Limited (IMPL); (vii) Astec Lifesciences Limited (Astec); and (viii) Anamudi Real Estates LLP (Anamudi); and G&B Group Entities include (i) Godrej & Boyce Manufacturing Company Limited (G&B Mfg); (ii) Godrej Holdings Private Limited (GHPL); (iii) Godrej Infotech Limited (GITL); and (d) RKN Enterprises (RKNE) [the GILAC Group Entities and G&B Group Entities are collectively referred to as the ‘Targets’].
The proposed combination involves various steps which inter alia include realignment of shareholding, realignment of the board of directors and management, reclassification of certain Family Branches as public shareholders, etc. in relation to the Targets with the ultimate objective being that the ABG Family and the NBG Family will continue to control and manage the GILAC Group Entities, and the JNG Family and the SVC Family will continue to control and manage the G&B Group Entities (Proposed Combination). The Family Branches have also executed a brand and non-compete agreement dated 30th April 2024 (Brand Agreement) to govern the use of the ‘Godrej’ brand by the Family Branches, post the Proposed Combination.
The Commission observed that the Proposed Combination is primarily in the nature of an internal reorganisation and is not likely to change the market dynamics in a significant manner. Nonetheless, the Commission considered existing/potential market linkages between (i) the activities of entities outside of Godrej group in which the ABG Family and NBG Family hold shareholding/control (ABG NBG Investee Entities) and the activities of GILAC Group Entities; (ii) the activities of entities outside of Godrej group in which the JNG Family and the SVC Family hold shareholding/control in any entity(ies) (JNG SVC Investee Entities) and the activities of G&B Group Entities.
The Commission noted that the activities of ABG NBG Investee Entities and GILAC Group Entities exhibit: (i) horizontal overlaps in the area of real estate and development and (ii) vertical linkages considering the upstream activity of home automation items and downstream activity of development and sale of real estate properties. The activities of JNG SVC Investee Entities and G&B Group Entities exhibit: (i) horizontal overlaps in the areas of real estate and development and school education services and (ii) vertical linkages considering the upstream activity of manufacture and sale of ready-mix concrete (RMC) and downstream activity of real estate and development and the upstream activity of manufacturing and sale of wall forming building materials and downstream activity of real estate and development. The Commission observed that considering the nature and extent of aforesaid overlaps/linkages, the Proposed Combination is not likely to cause a significant change in market dynamics in any of the plausible markets that could be delineated. Accordingly, the Commission is of the view that the Proposed Combination is not likely to result in appreciable adverse effect on competition in any of the plausible markets and accordingly, the question of the exact delineation of the relevant market(s) may be left open.
Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.
The order may be revoked if, at any time, the information provided by the Parties is found to be incorrect.
The Secretary is directed to communicate to the Parties accordingly.
