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The Competition Commission of India approves the combination involving Agro Tech Foods Limited, DMPL India Limited, Bharti Enterprises Limited, and related entities under Section 31(1) of the Competition Act, 2002. The combination includes the acquisition of one hundred percent shareholding in Del Monte Foods Private Limited by Agro Tech Foods Limited, and the issuance of equity shares in Agro Tech Foods Limited to Bharti and DMPL India. The commission concludes that the combination does not cause an appreciable adverse effect on competition in India.
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COMPETITION COMMISSION OF INDIA
Combination Registration No. C-2024/12/1214
21st January 2025
Notice under Section 6(2) of the Competition Act, 2002 jointly given by Agro Tech Foods Limited, DMPL India Limited, Bharti Enterprises Limited, Bharti (SBM) Holdings Private Limited, Bharti (RBM) Holdings Private Limited, Bharti (RM) Holdings Private Limited and Bharti (Satya) Trustees 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
On 3rd December 2024, the Competition Commission of India (‘Commission’) received a notice (‘Notice’) under sub-section (2) of Section 6 of the Competition Act, 2002 (‘Act’) jointly given by Agro Tech Foods Limited (‘ATFL’), DMPL India Limited (‘DMPL India’), Bharti Enterprises Limited (BEL), Bharti (SBM) Holdings Private Limited (‘Bharti SBM’), Bharti (RBM) Holdings Private Limited (‘Bharti RBM’), Bharti (RM) Holdings Private Limited (‘Bharti RM’), and Bharti (Satya) Trustees Private Limited (‘Bharti Satya’) on behalf of Bharti (Satya) Family Trust [hereinafter, Bharti SBM, Bharti RBM, Bharti RM, and Bharti Satya are collectively referred to as ‘Bharti Units’, and BEL and Bharti Units are collectively referred to as ‘Bharti’]. The Notice was filed pursuant to the execution of Share Purchase Agreement dated 14th November 2024 amongst ATFL, Del Monte Foods Private Limited (‘DMFPL’), and DMPL India (‘DMPL India SPA’); Share Subscription Agreement dated 14th November 2024 amongst ATFL, DMPL India, CAG-Tech (Mauritius) Limited (‘MCo.’) and Zest Holding Investments Limited (‘DMPL India SSA’); Share Purchase Agreement dated 14th November 2024 amongst ATFL, Bharti, and DMFPL (‘Bharti SPA’); and Share Subscription Agreement dated 14th November 2024 amongst ATFL, Bharti, MCo. and Zest Holding Investments Limited (‘Bharti SSA’) [hereinafter, ATFL, DMPL India, and Bharti are collectively referred to as ‘Notifying Parties’].
The Proposed Combination envisages the following steps, which are proposed to be effected simultaneously:
In terms of Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024, vide letter dated 16th December 2024, certain information and clarifications were sought from the Notifying Parties. The Notifying Parties submitted the response dated 23rd December 2024. Since the response was not complete, another letter was issued on 3rd January 2025 and the Notifying Parties furnished the response dated 8th January 2025.
ATFL is a public listed company and is ultimately controlled by Zest Holdings Investment Limited (‘ZHIL’) through its wholly owned subsidiary, MCo. which acts as the promoter of ATFL. ZHIL is incorporated under the laws of Mauritius, primarily for the purpose of holding investments. ZHIL’s presence in India is limited to ATFL. It is submitted that ZHIL is commonly controlled by Samara Capital Partners Funds III Limited (‘SCPFL’), Infinity Holdings (‘IH’), Infinity Holdings Sidecar I (‘IHSI’) through each of their investment managers i.e., Samara Capital Management Limited (‘Samara’) and Infinity Investment Management (‘IIM’), respectively.
Samara, all entities controlled by Samara, either directly or indirectly, and all entities controlled by affiliates of Samara are collectively referred to as the ‘Samara Group’. IIM and all entities controlled by IIM, either directly or indirectly, and entities controlled by affiliates of IIM are collectively referred to as the ‘Infinity Group’. ATFL, Samara Group, and Infinity Group are collectively referred to as the ‘ATFL Group’.
ATFL is engaged in the business of manufacturing, marketing, and selling a wide range of food products such as ready-to-cook snacks, ready-to-eat snacks, peanut butter, spreads, dips, breakfast cereals, chocolate confectionery, plain oats, almonds as well as edible oils.
BEL is a wholly owned subsidiary of Bharti Enterprises (Holding) Private Limited (‘BEHPL’), which is part of the Bharti group. BEL is involved in rendering management consultancy services within the Bharti group. Bharti RBM, Bharti SBM, and Bharti RM generate their income from management fees within the Bharti group. Bharti Satya is an entity incorporated to act on behalf of Bharti (Satya) Family Trust, which is a discretionary trust. The shareholding of the Bharti Units is held entirely by the Bharti family i.e., Sunil Bharti Mittal, Rajan Bharti Mittal, Rakesh Bharti Mittal, and other family members.
DMPL India is an investment holding company incorporated in Mauritius. It is solely controlled by DMPL India Pte. Ltd., which is incorporated in Singapore. DMPL India Pte Ltd. is a wholly owned subsidiary of Del Monte Pacific Ltd., incorporated in the British Virgin Islands and listed in Singapore. Each of these entities belongs to the Del Monte group, the ultimate holding companies of which are the Twin Palms Pacific Trust and Star Orchid Trust. DMPL India Pte. Ltd. and Del Monte Pacific Ltd. are beneficially owned mainly by the Campos Family and the Twin Palms Pacific Trust and Star Orchid Trust are beneficially owned by the Campos Family.
Apart from its investment in DMFPL, DMPL India has no business presence/operations in India. DMPL India on its own does not manufacture, supply, distribute, or sell any products and/or services in India.
DMFPL is a joint venture between the Del Monte group and the Bharti group. DMFPL is engaged in the manufacture and sale of packaged foods such as snacks, ready-to-eat foods, sauces and spreads/dips, edible oils, and pasta in India. DMFPL does not carry out manufacturing activities outside India but exports its products to various countries. DMFPL’s subsidiary, Del Monte Foods India (North) Private Limited, is engaged in the business of manufacturing and importing a range of food and beverage products for marketing, sale, and distribution in India and various other countries.
Based on the information provided in the Notice, DMFPL and ATFL [including through affiliates of ATFL Group namely Paradise Food Court Private Limited (‘Paradise Foods’) and ADF Foods Ltd. (‘ADF Foods’)] exhibit horizontal overlap in the broad market for the manufacture and sale of packaged foods in India (‘Packaged Foods Market’). At a narrower level, the parties exhibit overlaps in the snacks segment (which is further segmented into non-salted sub-segment); ready-to-eat segment; pasta segment; sauces, spreads and dips segment; and edible oils segment. The organized segment of the Packaged Foods Markets and all its abovementioned segments/sub-segments are also considered.
It is submitted that DMFPL and ATFL Group exhibit the following vertical overlaps:
In addition to the above, Bharti group and ATFL Group exhibit the potential vertical overlap in Packaged Foods Market (upstream) by ATFL Group and the market for the business of running, maintaining, and operating restaurant outlets or the food service market in India (downstream) by Bharti group through Gourmet Investments Private Limited including its subsidiaries namely, Texmex Cuisine India Private Limited and Shokutsu Nihonbashi Restaurants Private Limited.
The Commission decided to leave the delineation of the relevant market open, as it was observed that the Proposed Combination is not likely to cause appreciable adverse effect on competition in any of the plausible relevant market(s) in India.
Based on the submissions of the Notifying Parties, the Commission noted that the combined market share of DMFPL and ATFL Group in the Packaged Foods Market including its segments and sub-segments is insignificant, in the overall as well as the organised segment, except the sauces, spreads and dips segment where the combined market is in the range of [0-5]% and [5-10]%, in the overall and the organised segment, respectively and the incremental market share is in the range of [0-5]%.
With respect to the vertical overlaps, it is observed that the presence of the relevant entities in each of the upstream and downstream markets/segments is insignificant except in the market for antioxidants for food applications, where the market share of CFS is the range of [5-10]%. Based on the foregoing, it appears that the Proposed Combination is not likely to foreclose competition.
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.
This order may be revoked if, at any time, the information provided by the Notifying Parties is found to be incorrect.
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.
The Secretary is directed to communicate to the Notifying Parties accordingly.
