Acquisition of Equity Shares in Fleur Hotels Limited and Internal Restructuring of Lemon Tree Hotels Limited

COMPETITION COMMISSION OF INDIA Combination Registration No. C-2026/02/1382

07th April 2026

Notice under Section 6(2) of the Competition Act, 2002 given by Coastal Cedar Investments B.V., Lemon Tree Hotels Limited, Ms. Ila Dubey, Ms. Lillette Dubey, Spank Management Services Private Limited, Sparrow Buildwell Private Limited, Fleur Hotels Limited, Hamstede Living Private Limited, Carnation Hotels Private Limited, Canary Hotels Private Limited, Manakin Resorts Private Limited, Oriole Dr. Fresh Hotels Private Limited and Sukhsagar Complexes Private Limited

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

1. On 10th February 2026, the Competition Commission of India (Commission) received a Notice under Section 6(2) of the Competition Act, 2002 (Act) given by Coastal Cedar Investments B.V. (‘Coastal’/‘Acquirer’), Lemon Tree Hotels Limited (LTH), Fleur Hotels Limited (FHL), Hamstede Living Private Limited (Hamstede), Carnation Hotels Private Limited (Carnation), Canary Hotels Private Limited (Canary), Manakin Resorts Private Limited (Manakin), Oriole Dr. Fresh Hotels Private Limited (Oriole), Sukhsagar Complexes Private Limited (Sukhsagar), Ms. Ila Dubey, Ms. Lillette Dubey, Spank Management Services Private Limited (SMSPL) and Sparrow Buildwell Private Limited (SBPL) in relation to acquisition of certain equity shares by Coastal in FHL and internal restructuring of LTH group through amalgamation and demerger [hereinafter, Hamstede, Carnation, Canary, Oriole, Manakin and Sukhsagar are collectively referred to as ‘Amalgamating & Demerging Entities’; Ms. Ila Dubey, Ms. Lillette Dubey, SMSPL and SBPL are collectively referred to as ‘Promoter Group’; Coastal, LTH, FHL, Amalgamating & Demerging Entities, and Promoter Group are collectively referred to as ‘Notifying Parties’/‘Parties’].

2. The Notice was filed pursuant to the inter alia execution of (i) Share Purchase Agreement executed on 9th January 2026 amongst Coastal, APG Strategic Real Estate Pool N.V. (APG) and FHL (SPA), (ii) Shareholders’ Agreement executed on 9th January 2026 amongst Coastal, LTH, FHL, Mr. Patanjali Govind Keswani and SMSPL (SHA), (iii) Implementation Agreement executed on 9th January 2026 among LTH, FHL, Mr. Patanjali Govind Keswani, SMSPL, Coastal, Carnation, Hamstede, Oriole, Canary, Sukhsagar and Manakin (Implementation Agreement), and (iv) LTH, FHL, Hamstede, Carnation, Manakin, Sukhsagar, Oriole and Canary’s board resolutions each dated 9th January 2026, approving the Internal Restructuring (defined below).

3. The proposed combination is in the nature of an acquisition of certain equity shares in FHL by Coastal and internal restructuring of LTH group through amalgamation and demerger. The steps involved in the proposed combination are as follows:

   a. Step 1: Coastal, an investment holding company wholly owned and/or managed by the Warburg Pincus group, will acquire 41.09% of the equity share capital of FHL from APG (Coastal Acquisition); b. Step 2: Hamstede and Carnation, both wholly owned subsidiaries of LTH, will be amalgamated into LTH pursuant to a scheme of amalgamation (Amalgamation 1). No equity shares will be issued by LTH as consideration for Amalgamation 1; c. Step 3: Four wholly owned subsidiaries of LTH, namely Sukhsagar, Oriole, Canary, and Manakin, will be amalgamated into FHL, which is a subsidiary of LTH (Amalgamation 2). In consideration for Amalgamation 2, LTH will be issued equity shares of FHL; d. Step 4: LTH will transfer twelve (12) owned, leased or licensed hotel properties (Demerged Hotels), along with its investment in Arum Hotels Private Limited and the in-house hotel development and project development function of LTH (Demerged Business), to FHL by way of a demerger (Demerger). As consideration for the Demerger, the shareholders of LTH will be issued equity shares of FHL in the ratio of 311 equity shares of FHL for every 20 equity shares of LTH (Demerger Consideration); and e. Step 5: Coastal also proposes to acquire additional equity shares in FHL by way of a primary subscription (Primary Acquisition).

[Steps 2 to 4 above are hereinafter collectively referred to as ‘Internal Restructuring’. Further, Steps 1 to 5 above collectively constitute the ‘Proposed Combination’.]

4. In terms of Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024 (Combinations Regulations), vide letters dated 23rd February 2026 and 13th March 2026, certain information and clarifications were sought from the Parties. The Parties submitted their response on 10th March 2026 and 17th March 2026, respectively (Response).

5. Coastal is an investment holding company incorporated in the Netherlands, and its objective is to hold long-term investments. It does not engage in any business activities in India. It is wholly-owned/managed by Warburg Pincus group and accordingly, belongs to the ‘Warburg Pincus Group’.

6. LTH is an Indian hospitality company which operates a portfolio of hotels across multiple cities in India and select international locations, with properties spanning metropolitan centres such as Delhi-NCR, Mumbai, Bengaluru, and Hyderabad, as well as several tier II and tier III cities including Jaipur, Udaipur, Kochi, and Indore. LTH belongs to the Promoter Group and the same is stated to exercise material influence over the management and affairs of LTH.

7. FHL owns and leases certain hotels (some through its subsidiaries) which are managed and operated by LTH under a diverse portfolio of established brands. At present, FHL is jointly controlled by LTH and APG, and following the Proposed Combination, it will be jointly controlled by Warburg Pincus Group (through Coastal) and LTH.

8. For the purpose of competition assessment, the Commission considered the activities of all affiliates belonging to the Warburg Pincus Group (Warburg Affiliates), LTH and FHL which meet the materiality thresholds and have direct / indirect business presence in India.

9. Based on the information contained in the Notice, it was noted that there are no horizontal overlaps, vertical and/or complementary linkages between the business activities of Coastal / Warburg Affiliates and FHL in India. As regards LTH (and its subsidiaries) and FHL (and its subsidiaries), they are both engaged in the management of hotels in India. Within the hotel business, LTH and its subsidiaries and FHL and its subsidiaries, have horizontal overlaps in the market for provision of hotel accommodation services in India (Broader Relevant Market); market for provision of hotel accommodation services in 4 and 5 star hotels in India, in the cities of Delhi NCR and Mumbai (4 and 5 Star Relevant Markets); and market for provision of hotel accommodation services in 3 star hotels in India, in the cities of Pune, Delhi NCR, Hyderabad, Bangalore, Goa, Dehradun and Vishakhapatnam (3 Star Relevant Markets). The Commission noted that the business activities of the LTH (including its affiliates) and FHL (including its affiliates) do not give rise to any vertical or complementary linkages in any relevant market in India.

10. The Commission noted that the combined market shares and projected market shares till FY 2029 of the Parties in Broader Relevant Market, 4 and 5 Star hotels in India and Delhi NCR, and 3 star hotels in Goa are [0-5] %. Further, the combined market shares and projected market shares till FY 2029 of the Parties in 4 and 5 star hotels in Mumbai, 3 star hotels in India, Delhi NCR, Bangalore, Pune and Hyderabad, are [5-10]% with an increment of [0-5]%. Further, hotel accommodation sector in India is fragmented, characterized by the presence of several market players. Moreover, the Commission also considered the present shareholding pattern and control structure of FHL and resultant change in market dynamics following the Proposed Combination, in light of which overlaps between LTH and FHL, appears to be notional.

11. 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.

12. The order may be revoked if, at any time, the information provided by the Notifying Parties is found to be incorrect.

13. The information provided by the Notifying Parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

14. The Secretary is directed to communicate to the Notifying Parties accordingly.