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The Competition Commission of India approves the proposed combination involving the amalgamation of Viyash Group Entities, Vindhya Organics, and Geninn Life Sciences into Viyash Life Sciences, followed by the merger of Viyash Life Sciences and Sequent Research into Sequent Scientific Limited. The proposed combination includes capital reduction, share and warrant issuances, and the cancellation of inter-company shareholdings across the merging entities. The Commission concludes that the transaction does not cause an appreciable adverse effect on competition in India because the combined and incremental market shares of the parties remain low across all relevant markets. The approval is subject to the condition that the provided information remains correct.
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COMPETITION COMMISSION OF INDIA
Combination Registration No.C-2024/12/1218
21ˢᵗ January 2025
Notice under Section 6(2) of the Competition Act, 2002 filed by Sequent Scientific Limited, Sequent Research Limited, Viyash Life Sciences Private Limited, Symed Labs Limited, Appcure Labs Private Limited, Vindhya Pharma (India) Private Limited, Vandana Life Sciences Private Limited, S.V. Labs Private Limited, Vindhya Organics Private Limited, and Geninn Life Sciences 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 10ᵗʰ December 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 Sequent Scientific Limited (SSL), Sequent Research Limited (SRL), Viyash Life Sciences Private Limited (Viyash), Symed Labs Limited (Symed), Appcure Labs Private Limited (Appcure), Vindhya Pharma (India) Private Limited (Vindhya Pharma), Vandana Life Sciences Private Limited (Vandana), S.V. Labs Private Limited (SV Labs), Vindhya Organics Private Limited (Vindhya Organics) and Geninn Life Sciences Private Limited (Geninn) [Viyash, Symed, Appcure, Vindhya Pharma Vandana and SV Labs are collectively referred to as Viyash Group Entities[^1]; Viyash, Viyash Group Entities, Vindhya Organics and Geninn are collectively referred to as Merging Entities; and SSL, SRL and Merging Entities are collectively referred to as Parties].
The notice has been filed pursuant to a board resolution passed by SSL and SRL on 26ᵗʰ September 2024, Implementation Agreement (IA) entered into by the Parties on 26ᵗʰ September 2024 and Composite Scheme of Amalgamation to be filed with the National Company Law Tribunal (NCLT) under Section 230 to 232 and other applicable provisions of the Companies Act, 2013 (Scheme).
The proposed transaction involves the amalgamation of (i) Viyash Group Entities into Viyash, with Viyash being the surviving entity; (ii) Vindhya Organics into Geninn, with Geninn being the surviving entity; (iii) Geninn into Viyash, with Viyash being the surviving entity; and finally, (iv) merger of Viyash and SRL into SSL, with SSL being the surviving entity. The proposed transaction will take place pursuant to a Composite Scheme of Amalgamation through a series of inter-connected steps as set out below:
In accordance with Regulation 14(2) of the Competition Commission of India (Combinations) Regulations, 2024, vide letter dated 23ʳᵈ December 2024, sought certain information(s)/ clarification(s) from the Acquirers and complete response to the same was received on 02ⁿᵈ January 2025. Subsequently, a voluntary submission was received on 15ᵗʰ January 2025.
Sequent Scientific Limited (SSL): SSL is a publicly listed company in which CA Harbor Investments (a special purpose acquisition vehicle, owned and controlled by investment funds advised by the affiliates of the Carlyle Group) holds 52.79%, while remaining 47.21% shareholding in SSL is held by public shareholders. SRL is a wholly owned subsidiary of SSL. Accordingly, both SSL and SRL belong to the Carlyle Group.
Sequent Research Limited (SRL): SRL is a wholly owned subsidiary of SSL, which operates as a contract research organization providing analytical services and a wide array of testing to the global pharmaceutical industry. SRL specializes in a wide array of testing, including trace elements, genotoxic impurities, and stability studies, adhering to global standards.
Viyash Life Sciences Private Limited (Viyash): Viyash is a pharmaceutical company and through its subsidiaries, it is primarily engaged in the development, manufacture and sale of Active Pharmaceutical Ingredients (APIs), Finished Dosage Formulations (FDFs) and intermediates for human healthcare in India. Entities of Viyash which meet the Materiality Threshold[^3] and have presence/ sales in India are namely: S.V. Labs, Appcure, Symed Labs, Vindhya Pharma and Vandana.
Symed Labs Limited (Symed): Symed is a wholly owned subsidiary of Viyash and is a pharmaceutical company that is primarily engaged in the manufacture and sale of APIs catering to a wide range of therapeutic areas for human healthcare. It also provides end-to-end solutions for chemistry related services in the pharmaceutical industry. In India, Symed is primarily engaged in the manufacture and sale of APIs catering to a wide range of therapeutic areas.
Appcure Labs Private Limited (Appcure): Appcure is a wholly owned subsidiary of Viyash. Appcure does not have any sales of FDFs in India and caters to customers outside India.
Vindhya Pharma (India) Private Limited (Vindhya Pharma): Vindhya Pharma is a wholly owned subsidiary of Viyash and has a wholly owned step-down subsidiary entity, SV Labs. It was engaged in retail export and supply of intermediates to its clients all across the globe. However, Vindhya Pharma ceased all its business operations in October 2022.
Vandana Life Sciences Private Limited (Vandana): Vandana is a wholly owned subsidiary of Viyash and was present in the business of manufacturing bulk intermediates and APIs. However, Vandana ceased its operations in November 2022.
S.V. Labs Private Limited (SV Labs): SV Labs is a wholly owned step-down subsidiary of Viyash (through Vindhya Pharma) and is engaged in the production of various chemical products and is a manufacturer of bulk intermediates. SV Labs does not have any operations outside India.
Carlyle Group: The Carlyle Group includes (a) Carlyle Group Inc. (Carlyle) (the ultimate parent entity of CA Hull Investments and CA Harbour Investments; (b) its Indian subsidiary i.e., Carlyle India Advisors Private Limited (CIAPL); and (c) the portfolio entities of the Carlyle Group (Carlyle Portco), that are present in India and/ or derive revenue from India (collectively referred to as the Carlyle Group). Carlyle advises alternative investment funds and other investment vehicles which invest across a wide range of industries, geographies, asset classes, and investment strategies to deliver attractive returns for their investors.
Geninn Life Sciences Private Limited (Geninn): Geninn is a holding company. Its Founders, i.e., Dr. Hari Babu Bodepudi, and Dr. Kalidindi Srihari Raju respectively hold majority of equity shares in Geninn (43.90% and 17% respectively). It has a wholly owned subsidiary, Vindhya Organics. Geninn does not have any operations in or outside India.
Vindhya Organics Private Limited (Vindhya Organics): Vindhya Organics is engaged in the business of development, manufacture and marketing APIs for human healthcare. Vindhya Organics is a pharmaceutical company, primarily engaged in the business of development, manufacture and marketing APIs, in India and worldwide.
It is submitted in the notice that Piramal Pharma Limited (Piramal) (a Carlyle Portco and a listed entity) and the Merging Entities exhibit horizontal overlaps in the ‘broad market for manufacture and sale of APIs’ (API Sale Market) and its following sub-segments: (i) ‘market for manufacture and sale of Dapagliflozin Propanediol Monohydrate API in India’ (DPM API Market), (ii) ‘market for manufacture and sale of Baclofen API in India’ (Baclofen API Market); (iii) ‘market for manufacture and sale of Bilastine API in India’ (Bilastine API Market); (iv) ‘market for manufacture and sale of Vortioxetine API in India’ (Vortioxetine API Market); and (v) ‘market for manufacture and sale of Deferasirox API in India’ (Deferasirox API Market) [collectively, referred to as Relevant API Markets]. Further, Piramal and the Merging Entities also exhibit horizontal overlaps in the ‘market for provision of CDMO services in India’ (Indian CDMO Market).
Further, it is submitted that there are potential as well as existing vertical relationships between the Carlyle Portcos and the Merging entities as follows: (i) Vertical relationship between the Carlyle Group (through Piramal) (at the upstream level) in the CDMO Market, and the Merging Entities (through Viyash) and SSL (at the downstream level) in the API Sale Market (Potential Vertical Relationship 1); (ii) Vertical relationship between the Merging Entities (through Viyash) (at the upstream level) in the CDMO Market, and the Carlyle Group (through Piramal) (at the downstream level) in the API Sale Market (Potential Vertical Relationship 2); (iii) Vertical relationship between Merging Entities (through Vindhya Organics) (at the upstream level) in the ‘market for manufacture and sale of (5-Bromo-2-chlorophenyl) (4-ethoxy-phenyl) methanone (D-Intermediate) in India’ (D-Intermediate Market) and the Carlyle Group (through Piramal) (at the downstream level) in the ‘market for manufacture and sale of the API for Dapagliflozin (D-API) in India’ (Existing Vertical Relationship 1); (iv) Vertical relationship between the Merging Entities (through Vindhya Organics) (at the upstream level) ‘market for the supply of homoveratronitrile and isoveratretilecynide in India’ and the Carlyle Group (through Piramal) (at the downstream level) in the ‘market for the Manufacture of Verapamil API in India’ (Existing Vertical Relationship 2); and (v) Vertical relationship between the Merging Entities (through Symed) (at the upstream level) in the ‘market for the supply of phentermine hydrochloride in India’ and the Carlyle Group (through Piramal) (at the downstream level) in the ‘market for the manufacture phentermine related formulations’ at the downstream level (Existing Vertical Relationship 3).
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 the combined market share of Piramal and the Merging Entities is in the range of [0-5] % in the API Sale Market. In the narrower Relevant API Markets, the incremental market share is nil. Further, there are other players in the API Sale Market and each of the Relevant API Markets (except in Deferasirox API Market).
Regarding Indian CDMO Market, it is noted from the submissions of the Parties that both the combined and incremental market shares of Piramal and the Merging Entities in the Indian CDMO Market are in the range of [0-5] %. Further, there are other players in this market.
With respect to Potential Vertical Relationship 1 and 2, it is noted from the submissions of the Parties that the market share is in the range of [0-5] % in all the upstream and downstream relevant markets. Further, there are other players in each of these relevant upstream and downstream markets. In relation to Existing Vertical Relationships 1, 2 and 3, it is noted that the supply relationship between the Parties is miniscule and both Piramal and Viyash have been portfolio companies of the Carlyle Group since 2021.
Given the submissions of the Parties that post the completion of the Proposed Combination the Carlyle Group will hold 62.44% in the merged entity and there will be no incremental shareholding or additional degree of control acquired by the Carlyle Group through the Proposed Combination, it appears that the Proposed Combination is not likely to result in any change in competition dynamics pursuant to the Proposed Combination.
Considering the material on record, including the details provided in the notice and the 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 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 Acquirers is found to be incorrect.
The information provided by the Acquirers 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 Acquirers accordingly.
