Abu Dhabi Ports Company PJSC

COMPETITION COMMISSION OF INDIA Combination Registration No. C-2023/10/1057 29th November 2023 Notice under Section 6(2) of the Competition Act, 2002 given by Abu Dhabi Ports Company PJSC 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 3rd October 2023, the Competition Commission of India (Commission) received a notice (Notice) under Section 6(2) of the Competition Act, 2002 (Act), given by Abu Dhabi Ports Company PJSC (Acquirer). The Notice was given pursuant to the execution of the Share Purchase Agreement between Mr. M. G. Maghami and others (collectively, Sellers) and the Acquirer on 2nd November 2022. 2. The Commission, vide its communications dated 19th October 2023 and 2nd November 2023, issued under Regulation 14(3) of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (Combination Regulations), required the Acquirer to remove defects from the Notice and furnish certain information relevant for assessment of the proposed combination. The Acquirer furnished its responses, vide submissions dated 31st October 2023, 1st November 2023 and 8th November 2023. The Acquirer also made submissions dated 21st November 2023 and 24th November 2023. Combination Registration No. C-2023/10/1057 Page 2 of 7 3. The proposed combination envisages an acquisition up to 71% of the share capital of Delanord Investments Limited (Target) [Proposed Combination] as under: - acquisition of 51% equity shareholding by the Acquirer in the Target; and - an option to acquire a further 20% equity shareholding by the Acquirer in the Target pursuant to exercise of a call option. The Acquirer may only exercise the call option by serving a call exercise notice on the specified shareholder during the period beginning on the date of issuance of 2025 Financial Statements1 and ending on 31st December 2026 (both dates inclusive) subject to certain condition related to certain financial parameter. 4. The Acquirer, listed on the Abu Dhabi Securities Exchange, is a trade, logistics and transport enabler. The Acquirer is, either directly or indirectly, engaged in the (i) operation of ports and terminals, (ii) provision of short-sea vessel operation services, (iii) provision of non-vessel operating common carrier (NVOCC) services, and (iv) provision of freight forwarding services. The Acquirer’s largest shareholder is Abu Dhabi Developmental Holding Company PJSC (ADQ) which owns 75.42% of its shares. ADQ in turn is directly wholly owned by the Government of Abu Dhabi. ADQ is a strategic investment vehicle of the Government of Abu Dhabi. The Acquirer Group competes with entities owned or controlled by the Government of Dubai. 5. The Acquirer conducts its business activities in India indirectly through the subsidiaries viz. Safeen Feeders Company Sole Proprietorship LLC (Safeen), Alligator Shipping Container Line LLC (Alligator) and Noatum Holdings S.L.U. (Noatum). Safeen is engaged in the provision of short-sea vessel operation services and currently operates through two routes connecting the UAE with the wider Gulf 1 The audited consolidated balance sheet as at the end of, and audited consolidated profit and loss account form the financial year ending on 31 December 2025 of the Target. Combination Registration No. C-2023/10/1057 Page 3 of 7 region and the Indian subcontinent (India, Pakistan, Bangladesh, Sri Lanka, and Maldives) [ISC Region]. Alligator is a global shipping and logistics service provider which operates as an NVOCC and has a presence, inter alia, in the Middle East, East Asia, and the ISC Region. Noatum is a provider of global integrated logistics solutions covering end-to-end supply chains. It is engaged in the provision of freight forwarding services, inter alia, in India, Korea, Vietnam, and China. 6. It has also been submitted that the Acquirer has a certain shareholding in Aramex PJSC (Aramex), a UAE-incorporated logistics firm that also provides sea freight forwarding services in India. Furthermore, in 2022, the Acquirer acquired Transmar International Shipping Company (Transmar), a provider of short-sea vessel operation services, which is headquartered in Egypt, serving routes in the Middle East, covering both the Red Sea and the Persian Gulf (calling at ports in Egypt, Sudan, Djibouti, the UAE, Saudi Arabia, and Jordan). Transmar does not provide its services in the ISC Region. The Acquirer Group has set up a joint venture NVOCC with Aramex. 7. The Target, belonging to the GFS Group, directly and through its controlled entities, is primarily engaged in the provision of: (i) short-sea vessel operation services, covering the Middle East, ISC Region, and Southeast Asia; (ii) support functions such as ship ownership and ship management; (iii) transport logistics services as an NVOCC; and (iv) a small amount of inland transportation services in East Africa. 8. The Target has a presence in India through three India-incorporated entities namely, Sima Marine (India) Private Limited (Sima Marine), Mahi Marine Private Limited (Mahi Marine), and Cordelia Container Shipping Line Private Limited (Cordelia). Additionally, the Target is also present in India through two foreign-incorporated entities, namely, Global Feeder Shipping PTE (GFS PTE) and Global Feeder Shipping LLC (GFS LLC). Sima Marine along with GFS LLC, and GFS PTE are engaged in the provision of short-sea vessel operation services for containerized cargo in the ISC Region. Cordelia is present in the provision of NVOCC services for containerized cargo in the ISC Region. Mahi Marine is engaged in the provision of Combination Registration No. C-2023/10/1057 Page 4 of 7 technical vessel management services to companies belonging to the GFS Group. 9. It has been submitted that the activities of the Acquirer Group and the Target exhibit horizontal overlaps in the following segments: (i) provision of short-sea vessel operation services for containerized cargo, and (ii) provision of NVOCC services for containerized cargo. 10. It has been submitted that the activities of the Acquirer Group and the Target exhibit the following vertical interfaces: (i) Vertical Overlap 1: provision of short sea vessel operation services for containerized cargo by the Acquirer Group and provision of NVOCC services for containerized cargo by the Target; (ii) Vertical Overlap 2: provision of short sea vessel operation services for containerized cargo by the Target and provision of NVOCC services for containerized cargo by the Acquirer Group; (iii) Vertical Overlap 3: provision of short sea vessel operation services for containerized cargo by the Target and provision of sea freight forwarding services for containerized cargo in India by the Acquirer Group; (iv) Vertical Overlap 4: provision of NVOCC services for containerized cargo by the Target and provision of sea freight forwarding services for containerized cargo by the Acquirer Group; and (v) Vertical Overlap 5: provision of container terminal services in the Middle East by the Acquirer Group and provision of NVOCC services for containerized cargo and provision of short-sea vessel operation services for containerized cargo by the Target. Combination Registration No. C-2023/10/1057 Page 5 of 7 11. With respect to geographical markets, the Acquirer has submitted that the Commission may consider the ISC Region as geographic delineation for the short-sea vessel operation services and NVOCC services. However, the Acquirer has also submitted the market-facing details for: (i) overlapping port clusters; (ii) overlapping port-pairs; and (iii) four trade lanes viz. India to the Middle East and vice versa, and India to the South East Asia and vice versa 12. The Commission vide its order dated 2nd June 2021, in Combination Registration No. C-2021/04/829, has observed as under: