1. Rasmeli Limited 2. Apollo Hospitals Enterprise Limited 3. Apollo Healthco Limited 4. Keimed Private Limited

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Page 1 of 11 COMPETITION COMMISSION OF INDIA Combination Registration No.C-2024/06/1157 20th August 2024 Notice under Section 6(2) of the Competition Act, 2002 filed by Rasmeli Limited, Apollo Hospitals Enterprise Limited, Apollo Healthco Limited, Keimed Private Limited CORAM: Ms. Ravneet Kaur Chairperson Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 31(1) of the Competition Act, 2002 1. On 6th 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 Rasmeli Limited (Rasmeli), Apollo Hospitals Enterprise Limited (AHEL), Apollo Healthco Limited (AHL), Keimed Private Limited (Keimed/ KPL). The notice has been filed pursuant to the Investment Agreement dated 26th April 2024 entered into between Rasmeli, AHEL, AHL and Shobana Kamineni (IA); the Shareholders’ Agreement dated 26th April 2024, inter alia entered into between Keimed, Shobana Kamineni, and AHL (Keimed SHA); Keimed Framework Agreement dated 26th April, 2024, inter alia entered into between AHL, Keimed, and Ms. Shobana Kamineni [Hereinafter, AHL and Combination Registration No. C-2024/06/1157 Page 2 of 11 Keimed are collectively referred to as “Targets”. Further, the Acquirers and the Targets are collectively referred to as the “Parties”]. 2. The proposed transaction comprises the following inter-connected transactions: I. Rasmeli’s Tranche 1 Investment in AHL: In Tranche 1, Rasmeli proposes to subscribe to the following: i. Class A Compulsorily Convertible Preference Shares (CCPS) on subscription of which Rasmeli would hold 10.133% of share capital and voting rights in AHL on an as-if-converted basis and one equity share in AHL (together, Class A Subscription Securities); and ii. Partly paid-up Class B CCPS in AHL on subscription of which Rasmeli will hold up to 6.755% of share capital and voting rights in AHL on an as-if- converted basis (together, “Rasmeli Tranche 1 Investment”). Accordingly, in the Rasmeli Tranche 1 Investment, Rasmeli will acquire shareholding in aggregate representing up to 16.9% of the share capital of and voting rights in AHL on an as-if-converted basis. II. AHL’s initial share purchase in Keimed: After Rasmeli Tranche 1 Investment, AHL would acquire 1.964% equity shareholding in Keimed from Ms. Shobana Kamineni (Keimed Initial Share Purchase). III. Rasmeli Tranche 2 Investment in AHL: After 365 days from the completion of the Rasmeli Tranche 1 Investment, Rasmeli would convert the partly-paid Class B CCPS in AHL into fully paid Class B CCPS (Rasmeli Tranche 2 Investment). On the date of completion of Rasmeli Tranche 2 Investment, Rasmeli would hold 16.9% of the share capital of and voting rights in AHL on an as-if-converted basis. Combination Registration No. C-2024/06/1157 Page 3 of 11 IV. Upon completion of Rasmeli Tranche 2 Investment above, AHL will undertake the following transactions: i. AHL’s final share purchase in Keimed: AHL shall acquire equity shares of Keimed, from Ms. Shobana Kamineni amounting to approximately 7.712% share capital in Keimed (Keimed Final Share Purchase); and ii. AHL share subscription in Keimed: AHL will subscribe to equity shares of Keimed amounting to approximately 1.542% share capital in Keimed, (Keimed Investment); Upon completion of the Keimed Initial Share Purchase, Keimed Final Share Purchase and Keimed Investment, AHL would hold approximately 11.189% share capital of and voting rights in Keimed. V. Keimed Merger: Within 15 months from the completion of the Rasmeli Tranche 1 Investment, Keimed and AHL would take all necessary steps to give effect to the merger of Keimed into AHL such that Keimed would stand dissolved upon completion of the merger (Keimed Merger). As on date of completion of Keimed Merger, (i) Rasmeli would hold up to 12.125% of the share capital and voting rights in the merged entity on an as-if-converted basis; and (ii) shares in Keimed shall stand cancelled. VI. AHEL Additional Investment in AHL: Prior to Rasmeli Tranche 1 Investment, AHEL proposes to make the following investments in AHL: i. AHL Preferential Allotment to AHEL: Subscription to equity shares of AHL by AHEL pursuant to a preferential allotment (Parent Investment), after completion of which AHEL will hold 97.61% of the equity share capital of AHL on an as-if-converted basis; and ii. Bonus Issuance: Issue of fresh equity shares by AHL to AHEL and other shareholders. Combination Registration No. C-2024/06/1157 Page 4 of 11 AHEL currently holds 97.53% of the share capital of AHL.Upon completion of the Parent Investment and Bonus Issuance, AHEL would hold approximately 99.94% shareholding in AHL. [Rasmeli Tranche 1 Investment, Rasmeli Tranche 2 Investment, Keimed Initial Share Purchase, Keimed Final Share Purchase, Keimed Investment, Keimed Merger, Parent Investment and the Bonus Issuance are collectively referred to as the “Proposed Combination”]. 3. In terms of Regulation 14 of Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, certain information(s)/ clarification(s) were sought vide communication dated 18thJune 2024, and 11th July 2024 and the responses to the same were received on 25th June 2024 and 19th July 2024. 4. Rasmeli is an entity incorporated in Cyprus in July 2023 having principal activity of holding investments. It is the wholly owned subsidiary of Rasmeli Midco Limited (Cyprus), which on consummation of the Proposed Combination will be held by certain funds/limited partnerships (collectively referred to as “Advent International GPE X”), which are ultimately managed by Advent International, L.P. (formerly Advent International Corporation) (Advent). Rasmeli is an investment holding company, and apart from this, there are no other business activities that are carried out by Rasmeli in India. Rasmeli has no activities or presence in India. 5. Advent is a global private equity investor founded in 1984. Certain funds managed by Advent have invested in various private equity investments globally. The firm focuses on investments in five core sectors globally, including business and financial services, health care, industrial, retail, consumer and leisure, and technology. Advent has an indirect subsidiary in India, Advent PE Advisors Private Limited, which assists in identifying Indian investment opportunities. Advent’s India office has invested in Combination Registration No. C-2024/06/1157 Page 5 of 11 sectors such as business and financial services, retail, consumer and leisure, healthcare, industrial and technology. 6. AHEL is a publicly listed company. It is the parent company of the Apollo Hospitals group. AHEL is engaged in the business of providing the following services in India: (i) tertiary and secondary healthcare services including operating & managing hospitals and hospital based pharmacies; (ii) providing hospital project consultancy services, branding & operations management support services for healthcare providers; and (iii) providing retail healthcare services which includes operating primary healthcare clinics, birthing centres, short stay surgery centres, sugar management centres, dental & dialysis centres and diagnostic services. AHEL is not active in any business activities outside of India. 7. AHL is a part of the Apollo Hospitals group. AHL operates the “Apollo 24|7” platform in India which helps users/customers to book doctor appointments and diagnostic tests. Orders are fulfilled by AHEL and AHLL for doctor consultations and Apollo Health and Lifestyle Limited (AHLL) for diagnostic tests. Customers seeking to place pharmacy orders are redirected to the Apollo Pharmacies Limited (APL) platform, and the pharmacy orders are fulfilled by APL on the APL platform. AHL also operates in the pharmacy distribution segment where it sources pharmaceutical, FMCG, OTC, private label products and sells these to APL. It is stated that AHL’s wholesale pharmaceutical distribution is only captive in nature, as sales are made only to APL. Further, AHL is an investor in Apollo Medicals Private Limited (AMPL). APL and Apollo Pharmalogistics Private Limited (APPL) are wholly-owned subsidiaries of AMPL. AHL is not active in any business activities outside of India. 8. Keimed is the parent company of the Keimed group which includes all downstream affiliates of Keimed which meet the Materiality Thresholds1. In India, Keimed is 1 Affiliate refers to an entity in which any party, directly or indirectly has: (i) shareholding of 10% or more; or (ii) a right or ability to exercise any right (including any advantage of commercial nature with any of the party or its affiliates) that is not available to an ordinary shareholder; or (iii) a right or ability to nominate a director or observer in another enterprise(s) ((i), (ii) and (iii) are collectively referred to as the Materiality Thresholds). Combination Registration No. C-2024/06/1157 Page 6 of 11 involved in the business of: (i) wholesale sale and distribution of pharmaceutical products, OTC products, medical equipment, surgical products, scientific apparatus and equipment for hospitals and fast-moving consumer goods (FMCG); (ii) through certain subsidiaries, retail sale of specialty pharmaceutical products; (iii) aggregation of sale & purchase pharmaceutical products data for prediction, consumption and/ or forecasting; and (iv) marketing and sale of pharmaceutical products. Keimed is not active in any business activities outside of India. 9. It is submitted in the notice that the Parties are present (directly and/ or through their group companies and affiliates) in the pharmaceutical sector in India. Since the Proposed Combination involves multiple inter-connected transactions, the competition assessment has been divided into two parts: (I) Overlaps arising from Rasmeli’s investment in AHL and the subsequent Keimed Merger into AHL - where Rasmeli is the ‘Acquirer’ and AHL and Keimed the ‘Targets’; and (II) Overlaps arising from AHL’s acquisition of share capital of Keimed and Keimed Merger into AHL- where, AHL is the ‘Acquirer’ and Keimed the 'Target’ for AHL’s acquisition of share capital of Keimed as well as for the Keimed Merger. A. Horizontal Overlaps (I) Horizontal Overlaps arising from Rasmeli’s investment in AHL and the subsequent Keimed Merger into AHL: 10. The Acquirers have submitted that Keimed through its wholly owned subsidiary, Auspharma Private Limited (Auspharma), is indirectly engaged in the marketing and sale of a limited number of pharmaceutical products. One of the Advent Affiliates, viz. Combination Registration No. C-2024/06/1157 Page 7 of 11 Bharat Serum and Vaccines Limited (BSVL) is engaged in the manufacturing and sale of certain limited pharmaceutical products. It is stated by the Parties that one of the pharmaceutical products manufactured by BSVL (i.e., Levokast - a drug that is inter alia used for the treatment of skin allergies, hay fever, etc.) exhibits a horizontal overlap (at the molecular level i.e., Levocetirizine + Montelukast) with a product marketed by Auspharma. Furthermore, though the molecular composition for Ossopan-D and Clavid D3 is not identical, the two drugs have an interchangeable therapeutic use, i.e., dietary supplement for bone and joint health. 11. Accordingly, it is submitted that relevant markets may be defined as: i. ‘Market for manufacturing, marketing and sale of pharmaceutical products in India’ (Pharmaceuticals Market) and its sub-segments: a. ‘Market for manufacture and sale of Levocetirizine + Montelukast in India at a molecular level’ (Levocetirizine + Montelukast Market). b. ‘Market for dietary supplements for bone and joint health in India’ (Dietary Supplements Market). (II) Horizontal Overlaps arising from AHL’s acquisition of share capital of Keimed and Keimed Merger into AHL: 12. It is submitted that the horizontal overlap between Keimed (on one hand) and AMPL and AHEL (on other hand) arises on account of the business of retail sale of specialty pharmaceutical products by Keimed (through certain subsidiaries) and the retail sale of pharmaceutical products by APL and AHEL. Further, it is stated by the Parties that there exists a limited horizontal overlap between Keimed and AHL in the market for wholesale sale and distribution of OTC products and FMCG in India. 13. Accordingly, it is submitted that relevant markets may be defined as: Combination Registration No. C-2024/06/1157 Page 8 of 11 i. ‘Market for the retail sale of pharmaceutical products in India’ (Pharmaceuticals Retail Market); and ii. ‘Market for the wholesale sale and distribution of OTC products and FMCG in India’ (OTC/FMCG Wholesale Market). B. Vertical Relationships (I) Vertical Relationships arising from Rasmeli’s investment in AHL and the subsequent Keimed Merger into AHL: 14. It is submitted that there is an existing supply relationship between Keimed on one hand and one of the Advent Affiliates, BSVL on other hand, as Keimed procures pharmaceutical products from BSVL for wholesale sale. Further, the Parties exhibit potential vertical relationships in the markets for: (i) manufacture and sale of beauty and personal care products (FMCG) and its narrower segment i.e., manufacturing and sale of haircare products, and (ii) provision of Contract Development and Manufacturing Organisations (CDMO)/Contract Manufacturing Organisations (CMO) services. 15. Accordingly, it is submitted that relevant markets with respect to vertical relationships between Rasmeli/Advent Affiliates, AHL And Keimed arising from the Rasmeli’s investment in AHL and Keimed Merger may be defined as: Existing Vertical Relationship i. Pharmaceuticals Market at the upstream level; and (a) Market for wholesale sale and distribution of pharmaceutical products in India (Pharmaceuticals Wholesale Market); and (b) Market for retail sale of pharmaceutical products in India (Pharmaceuticals Retail Market) at the downstream level [Vertical Relationship I] Combination Registration No. C-2024/06/1157 Page 9 of 11 Potential Vertical Relationship ii. Market for manufacturing of beauty and personal care products in India (Beauty and Personal Care Market) and its sub-segment i.e., Market for manufacturing and sale of haircare products (Haircare Market) at the upstream level; and (a) OTC/FMCG Wholesale Market, (b) Market for wholesale sale and distribution of FMCG in India (FMCG Wholesale Market), (c) Market for retail sale of OTC products and FMCG in India (OTC/FMCG Retail Market), and (d) Market for retail sale of FMCG in India (FMCG Retail Market) at the downstream level [Vertical Relationship II] iii. Market for provision of CDMO/ CMO services in India (CDMO/CMO Market) and its sub-segment Market for manufacturing of Omeprazole in India (Omeprazole Market) at the upstream level; and Pharmaceuticals Market and its sub-segment Market for marketing and distribution of Omeprazole in India’ (Omeprazole Market) at the downstream level [Vertical Relationship III] (II) Vertical Relationships arising from AHL’s acquisition of share capital of Keimed and Keimed Merger into AHL: 16. The Parties have submitted that there are certain existing as well as potential vertical relationships between Keimed (on one hand) and AHL, APL and AHEL (on other hand) arising from AHL’s acquisition of share capital of Keimed and Keimed Merger into AHL. Accordingly, the relevant markets for the purposes of assessment of such vertical relationships are defined as follows: Existing Vertical Relationships i. Pharmaceuticals Wholesale Market at the upstream level and ‘Market for the provision of healthcare services in India’ at the downstream level (Healthcare Services Market) [Vertical Relationship IV] Combination Registration No. C-2024/06/1157 Page 10 of 11 ii. Pharmaceuticals Wholesale Market at the upstream level and Pharmaceuticals Retail Market at the downstream level [Vertical Relationship V] iii. Pharmaceuticals Market at the upstream level and Pharmaceuticals Retail Market at the downstream level [Vertical Relationship VI] iv. OTC/ FMCG Wholesale Market at the upstream level and OTC/ FMCG Retail Market at the downstream level [Vertical Relationship VII] Potential Vertical Relationships v. Pharmaceuticals Market at the upstream level and Healthcare Services Market at the downstream level [Vertical Relationship VIII]. vi. Market for marketing and sale of OTC products and FMCG in India (OTC/FMCG Market ) at the upstream level and OTC /FMCG Wholesale Market at the downstream level [Vertical Relationship IX]. 17. It is submitted that there are no complementary relationships between the Parties, including Advent Affiliates (on one hand) and AHL and Keimed (on other hand), as well as between AHEL, AHL, AMPL (on one hand) and Keimed (on other hand). 18. 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. 19. Based on the submissions of the Parties with respect to the horizontal overlaps, it is noted that the combined market shares of the Parties are in the range of [0-5] % in each of the identified relevant markets. Further, there are other players present such as Sun Pharmaceuticals, Abbott India Limited and Cipla Limited in the Pharmaceuticals Market; Medplus Health Services Ltd., Axelia Solutions Pvt. Ltd., and Wellness Forever Medicare Pvt. Ltd. in the Retail Pharmaceuticals Market; Flipkart Wholesale Pvt. Ltd., Hiveloop Technology Private Limited (Udaan.com) and Indiamart Intermesh Limited in the OTC and FMCG Market. Combination Registration No. C-2024/06/1157 Page 11 of 11 20. Further, with respect to the vertical relationships mentioned above, it is noted from the submissions of the Parties that the individual market shares of the Parties are in the range of [0-5] % only in each of the identified upstream and downstream relevant markets. Further, there are other players present in each of these markets. Thus, it appears that the Proposed Combination is not likely to raise competition foreclosure concerns in any relevant market. 21. Considering the material on record, including details provided in the notice given under sub-section (2) of Section 6 of the Act and assessment of the combination based on the factors stated in sub-section (4) of 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 in any of the relevant market(s), and therefore, the Commission approves the same under Section 31(1) of the Act. 22. This order may stand revoked if, at any time, the information provided by the Acquirers is found to be incorrect. 23. The information provided by the Acquirers shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act. 24. The Secretary is directed to communicate to the Acquirers accordingly.