ITC Hotels Limited

Page 1 of 3 COMPETITION COMMISSION OF INDIA Combination Registration No. C-2024/04/1138 28th May 2024 Notice under Section 6(2) of the Competition Act, 2002 given by ITC Hotels Limited CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Order under Section 31(1) of the Competition Act, 2002 1. On 22nd April 2024, the Competition Commission of India (‘Commission’) received a Notice under Section 6(2) of the Competition Act, 2002 (‘Act’) given by ITC Hotels Limited (ITC Hotels). The Notice was filed pursuant to the Scheme of Arrangement approved by the respective boards of ITC Limited (ITC) and ITC Hotels (collectively, “Parties”) on 14th August 2023 (Scheme). 2. ITC is a professionally managed listed company which does not have any shareholder/shareholder group classified as a promoter/promoter group. ITC, directly or through its affiliates, is engaged in diversified businesses in India spanning fast-moving consumer goods (viz., cigarettes & cigars, foods, personal care products, education & stationery products, safety matches, agarbattis & dhoop), hotels, paperboards, paper and packaging, and agri-business. Combination Registration No. C-2024/04/1138 Page 2 of 3 3. ITC Hotels is a wholly owned newly incorporated subsidiary of ITC and is not carrying on any business activity at present. 4. Through the Scheme, ITC is proposing to demerge the businesses, undertakings, activities, operations, and properties of ITC, of whatsoever nature and kind and wheresoever situated, related to, or pertaining to the conduct of, or the activities of, the Hotels Business (Demerged Undertaking), to ITC Hotels. The Hotels Business means and includes the hotels and hospitality business of ITC undertaken by way of inter alia owning, licensing, operating, managing, servicing, marketing, and supervising the operations of hotels and includes accommodation, dining and banqueting services, and investments in the Hospitality Entities namely; (i) Srinivasa Resorts Limited (ii) Bay Islands Hotels Limited; (iii) Fortune Park Hotels Limited; (iv) Landbase India Limited; (v) Maharaja Heritage Resorts Limited; (vi) Gujarat Hotels Limited; (vii) International Travel House Limited; (viii) WelcomHotels Lanka (Private) Limited, Sri Lanka (Proposed Combination). Further, it is envisaged that shares of ITC Hotels will thereafter be listed, pursuant to which around 40 percent shareholding will continue to be held by ITC and around 60 percent shareholding will be held by ITC’s shareholders directly, in proportion to their shareholding in ITC. 5. As submitted, ITC holds around 13.69 percent stake in EIH Limited (EIH) which is also engaged in the operation of four and five star hotels across various cities in India leading to a horizontal overlap with the activities of Demerged Undertaking in the segment of four and five star hotels at a broader level in India and at a narrower level in the cities of (a) Agra; (b) Bangalore; (c) Bhubaneshwar; (d) Chandigarh; (e) Chennai; (f) Delhi NCR; (g) Hyderabad; (h) Jaipur; (i) Kolkata; (j) Mumbai; (k) Ranthambhore; (l) Shimla; and (m) Udaipur. Further, one of the entities forming part of the Demerged Undertaking i.e., International Travel House Limited (ITH) is engaged in providing travel and travel-related services such as cab rentals, air ticketing, hotel bookings, foreign exchange services, travel packages, etc. for corporate customers/businesses and accordingly leads to a vertical interface between the travel and travel related business of ITH and the hotels business of EIH. Combination Registration No. C-2024/04/1138 Page 3 of 3 6. The Commission observed that the Proposed Combination is essentially an internal restructuring and is not likely to result in any significant change in the control or the operational dynamics of the Demerged Undertaking. Further, in the absence of any change in control or operational dynamics, the horizontal overlaps and/or the vertical linkages as noted above are at best notional and not likely to cause any significant change in competition dynamics of any of the plausible markets that could be delineated. Accordingly, the Commission is of the view that no further assessment of the Proposed Combination for impact on competition dynamics is warranted and the question of the exact delineation of the relevant market(s) is left open. 7. 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. 8. The order may be revoked if, at any time, the information provided by ITC Hotels is found to be incorrect. 9. The Secretary is directed to communicate to ITC Hotels accordingly.