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The Competition Commission of India approves the proposed combination involving the acquisition of equity shares in Vodafone Shared Operations Limited by Accenture Holdings B.V. and the acquisition of equity shares in Vodafone India Services Private Limited by Vodafone Shared Operations Limited. The approval applies to the specified transactions between Accenture Holdings B.V., Vodafone Shared Operations Limited, Vodafone India Services Private Limited, and Vodafone Global Services Private Limited. The Commission determines that the combination does not create an appreciable adverse effect on competition in India. The order remains subject to revocation if the provided information is found incorrect.
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COMPETITION COMMISSION OF INDIA Combination Registration No.C-2024/06/1163
14th August 2024
Notice under Section 6(2) of the Competition Act, 2002 filed by Vodafone Shared Operations Limited and Accenture Holdings B.V.
CORAM:
Ms. Ravneet Kaur Chairperson
Mr. Anil Agrawal Member
Ms. Sweta Kakkad Member
Mr. Deepak Anurag Member
Order under Section 31(1) of the Competition Act, 2002
On 25th June 2024, the Competition Commission of India (Commission) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (Act) filed by Accenture Holdings B.V. (Accenture) and Vodafone Shared Operations Limited (VSOL) [hereinafter, the Accenture and VSOL are collectively referred to as the "Acquirers"].
The notice has been filed pursuant to Shareholders' Agreement dated 21st June 2024 among Vodafone International Operations Limited (VIOL), Accenture and VSOL and Share Purchase Agreement dated 21st June 2024 among Vodafone Mauritius Limited (VML), Vodafone Tele-Services (India) Holdings Limited (VTIL) and VSOL.
The proposed combination relates to:
The Proposed JV Transaction and the Proposed VISPL Transaction are together referred to as the Proposed Combination [hereinafter, Accenture, VSOL, VISPL, and VGSPL are collectively referred to as the "Parties"].
In terms of Regulation 14 of Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, communication dated 9th July 2024 was issued to the Acquirer seeking certain information(s)/ clarification(s), inter alia, relating to the activities of the Parties and the response to the same was received on 19th July 2024.
Accenture is a private limited liability company incorporated under the laws of the Netherlands. Accenture is a holding company and is not engaged in any trading activities. Accenture belongs to the Accenture Group whose ultimate parent entity is Accenture plc. Accenture plc together with its subsidiaries and affiliates is referred to as the Accenture Group. The Accenture Group provides IT and consulting services. It operates in four service groups, namely, strategy and consulting, song (previously known as 'Accenture Interactive'), technology and operations. In India, Accenture Group is active in the provision of Information Technology and Information Technology Enabled Services (IT & ITES) through its entities.
VSOL is a private limited company incorporated under the laws of England and Wales. It is currently wholly owned by VIOL. Both VIOL and VSOL are indirect wholly owned subsidiaries of Vodafone. VSOL is presently engaged in the provision of shared services to the Vodafone Group and its network of partner telecommunications companies.
VISPL and VGSPL are private limited companies incorporated under the laws of India. VISPL is an indirect wholly owned subsidiary of Vodafone and holds 100% of the equity interest in VGSPL. VGSPL is, thus, a wholly owned subsidiary of VISPL and an indirect wholly owned subsidiary of Vodafone. VISPL and VGSPL are engaged in providing IT & ITES services to the Vodafone Group outside India. They provide IT & ITES from India; however, this is only to other entities within the Vodafone Group outside India. They do not provide services to third parties, i.e., entities outside the Vodafone Group. They also do not provide services to customers in India.
Vodafone is the parent entity of the Vodafone Group and the ultimate controlling entity of VSOL, VISPL and VGSPL. Vodafone operates mobile and fixed telecommunication networks in several countries across two main geographic regions, Europe and Africa. Its business activities in individual countries are carried out through operating companies which provide a range of connectivity and digital services to consumers and business customers. It also partners with mobile networks in countries outside its footprint. Vodafone's portfolio of local markets is supported by corporate services and shared operations. Its business is comprised of infrastructure assets, shared operations, growth platforms and retail and service operations.
Vodafone together with its subsidiaries and affiliates is referred to as the Vodafone Group. The Vodafone Group's activities in India primarily consist of: (i) business support services, provided within the Vodafone Group; (ii) corporate social responsibility activities; (iii) outsourcing hub for back-end IT support, data centre operations and hosting services, provided within the Vodafone Group; (v) trading of mobile handsets, data card and related accessories and services; (vi) telecom operations and mobility; (vii) building, owning, operating and maintaining passive telecom infrastructure, and provision of passive telecom infrastructure services; (viii) provision of high-speed broadband internet access through cable network, high bandwidth internet broadband services to the enterprise segment and infrastructure support to licensed telecommunications service providers; (ix) provision of IT & ITES, provided within the Vodafone Group, etc.
It is stated in the notice that since pursuant to the Proposed VISPL Transaction, VSOL proposes to acquire 100% of the equity shares of VISPL (and indirectly, VGSPL), the overlap assessment in relation to the Proposed Combination is carried out between the activities of: (a) Accenture and its affiliates in India (Accenture Downstream Affiliates) and (b) VSOL and its affiliates in India (including VISPL and VGSL) (Vodafone Downstream Affiliates).
It is submitted that Accenture and Vodafone Downstream Affiliates have overlapping activities in India in the IT & ITES Sector since both provide IT & ITES in and/ or from India. Accordingly, Accenture and Vodafone Downstream Affiliates exhibit horizontal overlap at a broad level in the 'market for the provision of IT & ITES in India' (IT & ITES Market/ Broad Market) and at a narrow level in the following segments: (i) BPO Services Segment in India, (ii) Application Implementation and Managed Services Segment in India, (iii) Infrastructure Implementation and Managed Services Segment in India, and (iv) Consulting Segment in India. It is submitted that there are no vertical or complementary links between Accenture and Vodafone Downstream Affiliates.
The Commission decides to leave precise delineation of the relevant market open, as it was observed that because of the reasons stated below, the Proposed Combination is not likely to result in appreciable adverse effect on competition irrespective of the manner in which the relevant market is delineated.
Based on the submissions of the Parties, it is noted that while the market shares of Accenture Downstream Affiliates in the IT & ITES Market and its segments are in the range of [0-5] %, the market share of Vodafone Downstream Affiliates in the IT & ITES Market and its segments is in the range of [0-5] %, as their activities are export-only and captive (i.e., such services are provided only within the Vodafone Group and only outside India). Thus, the incremental market shares are nil as a result of the Proposed Combination. Further, there are other players present in the IT & ITES Market and its segments, both domestic and international, which provide services across India.
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 subsection (4) Section 20 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.
This order may stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect.
The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.
The Secretary is directed to communicate to the Acquirer accordingly.
