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The Competition Commission of India approves the acquisition of a seven percent shareholding in Bagmane Developers Private Limited and Bagmane Rio Private Limited by BREP Asia III India Holding Co VIII Pte. Ltd. The acquirer purchases the securities from Bagmane Realty and Infrastructure LLP under a framework agreement. The acquirer obtains the right to nominate a director and holds certain veto rights over business decisions. The commission finds that the combination does not create an appreciable adverse effect on competition in India. The order remains subject to revocation if the provided information is incorrect.
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COMPETITION COMMISSION OF INDIA Combination Registration No. C-2024/11/1203
10th December 2024
Notice under Section 6(2) of the Competition Act, 2002 given by BREP Asia III India Holding Co VIII Pte. Ltd.
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 1st November 2024, the Competition Commission of India (‘Commission’) received a notice (‘Notice’) under Section 6(2) of the Competition Act, 2002 (‘Act’), given by BREP Asia III India Holding Co VIII Pte. Ltd (‘BREP’ / ‘Acquirer’).
The Notice was filed pursuant to the Binding Framework Agreement dated 31st October 2024 amongst the Acquirer, Bagmane Developers Private Limited (‘BDPL’), Bagmane Rio Private Limited (‘BRPL’) [collectively, ‘Target Entities’], and the Promoters of Target Entities (‘Framework Agreement’).
The Proposed Combination relates to the acquisition of 7% shareholding by the Acquirer in each of the Target Entities i.e., BDPL and BRPL from Bagmane Realty and Infrastructure LLP (‘Seller’) on a fully diluted basis, by way of purchase of securities of the Target Entities.
Pursuant to the Proposed Combination, the Acquirer will inter alia have right to nominate a director on the Boards of Target Entities along with certain other rights such as those relating to veto rights over some business, legal and secretarial decisions of the Target Entities.
In terms of Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024, vide letter dated 11th November 2024, certain information and clarifications were sought and response to the same was submitted by the Acquirer after seeking an extension of time vide communication dated 27th November 2024.
Acquirer is an affiliate of funds advised or managed by affiliates of Blackstone Inc. (collectively, ‘Blackstone’). Blackstone, a global alternative asset manager is headquartered in the United States and has offices in a number of geographies, including Europe and Asia. Blackstone is listed on the New York Stock Exchange and operates as an investment management firm, not as a conglomerate or holding company.
The Target Entities are primarily engaged in the development, leasing, and maintenance of commercial real estate, hospitality business as well as allied services like generation of renewable power. The Target Entities belong to the Bagmane Group which is engaged in commercial real estate and is stated to be a developer of business parks in the city of Bengaluru.
The Commission observed that Target Entities and certain affiliates of Blackstone are engaged in the commercial real estate in the city of Bengaluru. Apart from above, BDPL is currently undertaking development of two hospitality projects in Bengaluru and certain affiliates of Blackstone are already engaged in the provision of hospitality services in the city of Bengaluru. Further, one of the entities of BDPL i.e., Bagmane Green Power LLP (‘BGPL’) owns solar power plant and certain affiliates of Blackstone are also engaged in solar power generation in India.
However, considering that the presence of Target Entities and Blackstone affiliates in the aforementioned segments of commercial real estate and hospitality services in the city of Bengaluru and solar power generation in India, is not likely to alter the competition landscape in both horizontal and vertical contexts in any significant manner regardless of how the relevant market(s) are delineated, the issue of exact delineation of relevant market(s) is left open.
With regards to the segment of commercial real estate in the city of Bengaluru, the Commission noted that combined market shares of the parties are in the range of [10-15]% with an incremental share in the range of [0-5]%. In relation to the hospitality services in the city of Bengaluru, the Commission observed that Target Entities’ hospitality projects are currently under-construction. As far as the solar power generation in India is concerned, the presence of the parties is very miniscule.
Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on 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, and therefore, the Commission hereby approves the Proposed Combination under Section 31(1) of the Act.
This order may be revoked if, at any time, the information provided by Acquirer is found to be incorrect.
The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.
The Secretary is directed to communicate this order to the Acquirer.
