Indorama Netherlands B.V. Combination Approval

[Image omitted. See the official document.]

COMPETITION COMMISSION OF INDIA Combination Registration No. C-2025/03/1261

13th May 2025

Notice under Section 6(2) of the Competition Act, 2002 given by Indorama Netherlands B.V.

CORAM:

Ms. Ravneet Kaur Chairperson

Ms. Sweta Kakkad Member

Mr. Deepak Anurag Member

Order under Section 31(1) of the Competition Act, 2002

1. On 21st March 2025, the Competition Commission of India (Commission) received a notice (Notice), under sub-section (2) of Section 6 of the Competition Act, 2002 (Act), given by Indorama Netherlands B.V. (Acquirer). The Notice has been given pursuant to execution of the Share Purchase Agreement amongst the Acquirer, Epsilon Bidco Pte. Ltd. (Epsilon) and EPL Limited (Target/EPL) on 24th February 2025 (SPA).

2. The Proposed Combination envisages the purchase of equity shares representing 24.9% of the issued and paid-up share capital of EPL by the Acquirer from Epsilon. Further, the Acquirer will have a right to nominate one director on the board of EPL, and veto right on certain matters.

3. The Acquirer, vide communications dated 4th April 2025 and 17th April 2025, issued under Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024, was required to remove defects from the Notice and furnish certain information relevant for the purpose of assessment of the proposed combination. The Acquirer made its submissions vide responses dated 10th April 2025 and 23rd April 2025.

4. The Acquirer, incorporated under the laws of the Netherlands, is a wholly owned subsidiary of Indorama Ventures Public Company Limited (IVL). Indorama Resources Limited (IRL) holds 64.74% shareholding of IVL.[1] IRL is indirectly held by Mr. Aloke Lohia and his immediate family, and a trust, whose beneficiaries are Mr. Sri Prakash Lohia and his immediate family members.

5. The Acquirer is engaged in manufacture of man-made fibres and also operates in the financial services business. IVL has a global presence with integrated, diverse portfolio of chemicals, polymers and fibres, delivering solutions to customers in more than 100 countries.

6. EPL, listed on the BSE Limited and on the National Stock Exchange of India Limited, is engaged in the business of manufacturing and sales of packaging products, including extruded and laminated plastic tubes, laminates, and caps and closures. As on 31st December 2024, Epsilon, owned by funds advised and/or managed by affiliates of Blackstone Inc. (Blackstone), held 51.45 % shares of EPL.

7. It has been submitted that IVL group (including its affiliates) are engaged in the manufacturing of polyethylene terephthalate (PET) and PET products outside India. These PET products include PET rigid packaging solutions which primarily comprises of PET bottles. EPL is present in the plastic packaging sector and manufactures high-density polyethylene (HDPE) based flexible packaging. PET and HPDE are not substitutable packaging substrates and have distinct industrial applications.

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[1] An additional 0.02% of the shareholding of IVL is directly held by Mr. Aloke Lohia. IVL is a listed company, the remaining shareholding of 35.2% is held by retail and institutional investors.

8. It has been further submitted that Thai Plaspac Public Company Limited (TPAC), an entity in which Mr. Aloke Lohia's son has majority shareholding, is engaged in manufacturing of HDPE rigid packaging. On the other hand, EPL is present in the plastic packaging sector and manufactures HDPE based flexible packaging. Rigid plastic packaging retains its shape, as it is made from material that exhibit no elastic deformation and perfect plastic deformation. The shape of flexible packaging products, on the other hand, can be readily changed when filled or during use. In terms of product form, flexible packaging can be in the form of bags, pouches, wraps, rolls and laminates while rigid packaging is typically in the form of bottles and containers. Rigid HDPE packaging and flexible HDPE packaging are not substitutable due to distinct consumer preference. The European Commission has also looked at this distinction; and based on surveys of consumers and suppliers found that there is no demand and supply-side substitutability between rigid plastic packaging and flexible plastic packaging. Therefore, the rigid and flexible packaging do not exhibit horizontal overlap.

9. It has also been submitted that TPAC manufactures and sells caps and closures for rigid plastic packaging in India. EPL typically does not manufacture or sell caps and closures as a standalone product and only supplies caps and closures as a part of its integrated flexible plastic packaging products. However, EPL supplies caps and closures as an independent, standalone product only under one contractual arrangement in India, and during FY 2023-24 earned a revenue which is not significant enough to raise competition concern.

10. 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.

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

12. The information provided by 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 this order to Acquirer.