2452991 Ontario Limited

Page 1 of 4 COMPETITION COMMISSION OF INDIA (Combination Registration No. C-2024/05/1148) 3rd September 2024 Notice under Section 6(2) of the Competition Act, 2002 given by 2452991 Ontario 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 17th May 2024, the Competition Commission of India (Commission) received a Notice under Section 6(2) of the Competition Act, 2002 (Act) given by 2452991 Ontario Limited (OTPP 1/Acquirer). The Notice was filed based on the binding Commitment Letter dated 12th March 2024, issued by OTPP 1 to the Highway Infrastructure Trust (HIT/Target Trust) which was agreed to and counter-signed by Highway Concessions Private Limited (HC One), the investment manager of the Target Trust. 2. The Proposed Combination envisages OTPP 1’s acquisition of additional units of the Target Trust to such extent that OTPP 1’s unitholding in the Target Trust remains below 25 percent. It has been informed that the Target Trust proposes to utilise the proceeds to fund the acquisition of certain road infrastructure assets in the form of SPVs of PNC Infratech Limited (PNC Infratech) and PNC Infra Holdings Limited (PNC Infra Holdings). Combination Registration Number: C-2024/05/1148 Page 2 of 4 3. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of Business relating to Combinations) Regulations, 2011 (Combination Regulations), vide letter dated 7th June 2024 and 18th July 2024, certain information and clarifications were sought from the Acquirer. The response to this letter was submitted by the Notifying Party on 4th July 2024 and 29th July 2024, respectively. Thereafter, the Notifying Parties also made voluntary submissions on 9th August 2024 and 13th August 2024. 4. OTPP 1 is a wholly-owned subsidiary of Ontario Teachers’ Pension Plan Board (OTPPB/Acquirer Group), and it currently holds 19.86 percent unitholding of the Target Trust. The Acquirer Group is concerned with the administration of pension benefits and investment of pension plan assets of approximately 340,000 active and retired teachers in the Canadian province of Ontario. As of 31st December 2023, OTPPB held net assets worth CAD 247.5 billion. OTPPB invests in more than 50 countries, in a broad array of assets including public equities, fixed income, credit, commodities, natural resources, infrastructure, real estate, and venture growth. 5. In November 2021, OTPPB was allocated 25 percent units in National Highways Infra Trust (NHIT), an InvIT sponsored by the National Highway Authority of India (NHAI). As of April 2024, NHIT owned, operated and maintained a portfolio of fifteen toll roads, including in the states of Assam, Gujarat, Maharashtra, Madhya Pradesh, Rajasthan, Telangana, Uttar Pradesh, West Bengal, and Karnataka, spanning a total length of 1525 km and a concession period ranging between 20-30 years (NHIT Road Assets). OTPPB is also an anchor investor in National Investment and Infrastructure Fund (NIIF) [and its investment manager National Investment and Infrastructure Fund Limited (NIIFL)], with an effective stake of approximately 11 percent. NIIF’s investment in the five road assets fall into different geographical areas and pertain to different national highways (NIIF Road Assets). Hereinafter, NHIT Road Assets and NIIF Road Assets, are collectively referred to as OTTPB Road Assets] 6. The Target Trust, is an irrevocable trust settled under the Indian Trusts Act, 1882, and is registered as an infrastructure investment trust with the Securities Exchange Board Combination Registration Number: C-2024/05/1148 Page 3 of 4 of India (SEBI) to carry out the activities prescribed under the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations). HC One is the investment manager of the Acquirer Trust in terms of the InvIT Regulations and discharges all obligations of an investment manager under the InvIT Regulations. HC One is majority owned by Galaxy II, which is a special purpose vehicle indirectly majority owned by investment funds, vehicles and/or accounts advised and managed by KKR Co. & Inc (KKR). The Target Trust is also stated to be indirectly controlled by KKR. 7. The Target Trust owns SPVs incorporated in India, which are engaged in the business of operating roads and highways in India for which the SPVs have been granted government concessions. The Target Trust currently owns G6 Assets1, Udupi Tollway Private Limited (UTPL), three of the four HG Assets2 and portions of Macquarie Assets3 (collectively referred to as Target Trust Road Assets). 8. For the purpose of overlap assessment, the OTPPB Road Assets, on one hand and the Target Trust’s Road Assets, including the PNC SPVs proposed to be acquired by the Target Trust, have been considered. Considering their presence, it was observed that there are no horizontal overlaps between the origin and destination pairs between the OTPPB Road Assets on one hand and the Target Trust Road Assets on the other. 9. The Acquirer has submitted that each of the OTTPB Road Assets only conduct operations and management (O&M) activities for their own respective roads and do not provide O&M services to any third party for their road(s). Further, the Target Trust Road Assets also manage the O&M activities of their respective assets directly under the supervision of HC1 Project Manager Limited, and do not provide O&M services to third parties on a standalone basis. The PNC SPVs too only provide O&M services on a captive basis. However, some of the PNC SPVs engage third party contractors to 1 Includes (i) Nirmal BOT Limited (NBL), (ii) Dewas Bhopal Corridor Private Limited (DBCPL), (iii) Godhra Expressways Private Limited (GEPL), (iv) Jodhpur Pali Expressway Private Limited (JPEPL), (v) Shillong Expressway Private Limited (SEPL), and (vi) Ulundurpret Expressways Private Limited (UEPL). 2 Includes (i) Ateli Narnaul Highway Private Limited (formerly known as H.G. Ateli Narnaul Highway Private Limited) (HGANHPL), (ii) Rewari Ateli Highway Private Limited (formerly known as H.G. Rewari Ateli Highway Private Limited) (HGRAHPL), (iii) H.G. Rewari Bypass Private Limited (HGRBPL) (Target Trust has executed the definitive documents for the acquisition of HGRBPL, the same has not yet been transferred to the Target Trust); and (iv) Gurgaon Sohna Highway Private Limited (GSHPL). 3 Includes (i) 56.8% of Gujarat Road and Infrastructure Company Limited (GRICL), and (ii) Swarna Tollway Private Limited (STPL). Combination Registration Number: C-2024/05/1148 Page 4 of 4 provide O&M services only to their own road assets. Accordingly, given the presence of the Parties, a potential vertical linkage has been examined considering the upstream market for O&M of highways in the road infrastructure sector in India and the downstream market for road assets on origin and destination pair basis. 10. The combined market share of the OTPPB Road Assets and the Target Trust Road Assets, including the PNC SPVs, in the potential downstream market, on the basis of length of the road assets, is in the range of [0-5]%. Therefore, neither the OTPPB nor the Target Trust possess the ability or incentive to cause foreclosure in any of the markets that have been examined. 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 Acquirer is found to be incorrect. 13. The information provided by the Acquirer 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 Acquirer accordingly.