CDPQ Private Equity Asia Stake Acquisition in API Holdings

COMPETITION COMMISSION OF INDIA Combination Registration No.C-2023/11/1077

30th January 2024

Notice under Section 6(2) of the Competition Act, 2002 filed by CDPQ Private Equity Asia Pte Ltd.

CORAM:

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 November 2023, the Competition Commission of India (Commission) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 (Act) filed by CDPQ Private Equity Asia Pte. Ltd. (Acquirer/CDPQ Asia) for the proposed acquisition of stake in API Holdings Limited (Target/API) [Hereinafter, the Acquirer and Target are collectively referred to as 'Parties'].

2. The notice has been filed pursuant to the Binding Term Sheet and Letter Agreement both dated 18th September 2023 executed, inter alia, between certain investors, the Acquirer and the Target. The Acquirer is an existing investor in the Target and a pre-emption right holder under the existing Shareholder Agreement. Subject to the terms of the Binding Term Sheet dated 18th September 2023, the Acquirer shall subscribe to the Rights Issue by way of a primary subscription.

3. The proposed combination entails acquisition of additional shareholding (which will result in a shareholding from 3.5 % to 5% on a fully diluted basis), right to nominate a director on the Target's board along with certain reserved matter rights by the Acquirer in the Target (Proposed Combination).

4. In terms of Regulation 14 of Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, the Commission, vide communications dated 22.11.2023, 15.12.2023 and 18.01.2023 sought certain information(s)/clarification(s), inter alia, relating to the activities of the Parties and the response to the same was received on 07.12.2023, 22.12.2023 and 22.01.2024, respectively.

5. The Acquirer is a part of the CDPQ group. It is a direct wholly owned subsidiary of Caisse de dépôt et placement du Québec (CDPQ) located in Singapore. The Acquirer does not have any direct presence in India

6. CDPQ is a registered foreign portfolio investor under the Securities and Exchange Board of India (SEBI) (Foreign Portfolio Investors) Regulations, 2019. CDPQ is a Canadian institutional fund, which acts as a long-term institutional investor managing funds primarily for public and para-public pension and insurance plans in the province of Quebec, Canada.

7. The Acquirer, CDPQ and their affiliates have been collectively referred to as the 'Acquirer Group'. It is stated in the notice that the Acquirer Group is present in India through its indirect subsidiary CDPQ India Private Limited (CDPQ India), which provides advisory services to CDPQ Asia Pacific Pte. Ltd. CDPQ is also present indirectly in India through its real estate subsidiaries, Ivanhoe Cambridge Investment Advisory (India) Private Limited and SITQ India Pvt Ltd (SITQ). Further, CDPQ has also set up India Highway Concession Trust, an infrastructure investment trust registered with the SEBI, which invests in eligible infrastructure road assets in India. Additionally, CDPQ has certain investments in India and investments in entities outside India which have certain business operations/activities in India.

8. The Target is a company incorporated in India and is the ultimate parent entity of the API Holdings group. The Target, through its subsidiaries, is engaged in operating business relating to healthcare services. The Target's affiliate entity Aarman Solutions Private Limited (where the Target has 19.99% shareholding), through its subsidiary Axelia Solution Private Limited, operates an online e-commerce marketplace through a mobile application as well as a website called 'PharmEasy'. Further, the Target is engaged in the business of B2B (i.e., wholesale) sale and purchase of pharmaceutical and nutraceutical products and also undertakes activities of warehousing, storing and packaging of such products. Additionally, the Target also provides diagnostic and healthcare services to customers, directly, through the collection centres owned and operated by it or through partner collection centres through subcontracting arrangements with third parties.

9. It is submitted by the Acquirer that, in India, the Acquirer Group is not directly or indirectly engaged in producing or providing similar or identical or substitutable products or services as that of the Target, considering all plausible alternatives. Further, it is not engaged in India in either complementary activities or any activity relating to the production, supply, distribution, storage, sale and service or trade in products or provision of services which is at different stages or levels of the production chain in which the Target is involved, considering all plausible alternatives.

10. Considering the material on record, including details provided in the notice given under sub-section (2) of Section 6 of the Act and 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 Proposed Combination is not likely to have any appreciable adverse effect on competition in India in any of the relevant market(s), and therefore, the Commission approves the same under Section 31(1) of the Act.

11. This order may stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect.

12. The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

13. The Secretary is directed to communicate to the Acquirer accordingly.