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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
1.
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),
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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
Entities1; 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].
2.
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).
3.
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:
(i)
Reduction in the share capital of Viyash by cancelling of the partly paid-up
equity shares of Viyash (Step 1);
(ii)
Amalgamation of Symed, Appcure Vindhya Pharma Vandana and SV Labs,
into Viyash, with Viyash being the surviving entity. 100% of Viyash’s
shareholding in each of Symed, Appcure, Vindhya Pharma and Vandana, and
indirectly in SV Labs will stand cancelled (Step 2);
1 Symed, Vandana, Appcure and Vindhya Pharma are wholly owned subsidiaries of Viyash. SV Labs is a
wholly owned subsidiary of Vindhya Pharma and an indirect wholly owned subsidiary of Viyash. Each of these
entities are collectively referred to as Viyash Group Entities.
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(iii)
Amalgamation of Vindhya Organics into Geninn2, with Geninn being the
surviving entity. 100% of Geninn’s shareholding in Vindhya Organics shall
stand cancelled (Step 3);
(iv)
Amalgamation of Geninn into Viyash upon completion of Step 3, with Viyash
being the surviving entity and issuance of shares by Viyash to shareholders of
Geninn as per the share exchange ratio set out in the Scheme (Step 4);
(v)
Amalgamation of Viyash and SRL into SSL upon completion of Step 4, with
SSL being the surviving entity (Surviving Entity/ Amalgamated
Company); issuance of shares by SSL to shareholders of Viyash as per the
share exchange ratio set out in the Scheme; and issuance of warrants by SSL
to warrant holders of Viyash as per the warrant exchange ratio set out in the
Scheme. 100% of SSL’s shareholding in SRL will stand cancelled (Step 5).
(Step 1 to Step 5 are collectively referred to as the Proposed Combination).
4.
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.
5.
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.
6.
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
2 Vindhya Organics is a wholly owned subsidiary of Geninn. Geninn shareholding is 100% held by the
Founders (and the related affiliates of the Founders) of Viyash. Viyash, Viyash Group Entities, Vindhya
Organics, and Geninn are collectively referred to as Merging Entities.
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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.
7.
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 Threshold3 and have presence/ sales in India are namely: S.V.
Labs, Appcure, Symed Labs, Vindhya Pharma and Vandana.
8.
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.
9.
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.
10.
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.
3 The Parties have considered and relied upon the thresholds provided in Rule 2(b) of the Competition (Criteria
of Combination) Rules, 2024, i.e., an entity is considered to be an affiliate of another enterprise if that another
enterprise has––(i) ten per cent or more of the shareholding or voting rights of the enterprise; or (ii) right or
ability to have a representation on the board of directors of the enterprise either as a director or as an observer;
or (iii) right or ability to access commercially sensitive information of the enterprise. (Materiality Threshold)
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11.
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.
12.
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.
13.
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.
14.
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.
15.
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.
16.
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-
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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).
17.
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).
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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, 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).
20.
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.
21.
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.
22.
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.
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23.
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.
24.
This order may stand revoked if, at any time, the information provided by the
Acquirers is found to be incorrect.
25.
The information provided by the Acquirers shall be treated as confidential in terms of
and subject to provisions of Section 57 of the Act.
26.
The Secretary is directed to communicate to the Acquirers accordingly.
