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The Competition Commission of India approves the acquisition of 100 percent shareholding in O2 Energy SG Pte. Ltd. and O2 Power Midco Holdings Pte. Ltd. by JSW Neo Energy Limited. The acquirer takes over renewable energy assets and operations in India. The transaction includes intermediate share redemptions by group entities. The competition commission assesses horizontal overlaps in renewable power generation and vertical links with transmission and trading. The commission concludes that the combination does not cause appreciable adverse effect on competition in India. The approval stands revoked if the submitted information is incorrect.
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COMPETITION COMMISSION OF INDIA Combination Registration No. C-2025/01/1231
17th March 2025
Notice under Section 6(2) of the Competition Act, 2002 given by JSW Neo Energy Limited.
CORAM:
Ms. Ravneet Kaur Chairperson
Ms. Sweta Kakkad Member
Mr. Deepak Anurag Member
Order under Section 31(1) of the Competition Act, 2002
On 20th January 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 JSW Neo Energy Limited (Acquirer). The Notice was filed pursuant to inter alia execution of share purchase agreement dated 27th December 2024 amongst the Acquirer, O2 Power Pooling Private Limited (OPP) and O2 Power SG Pte. Ltd. (OPS) (SPA – 1) and share purchase agreement dated 27th December 2024 amongst the Acquirer, OPP, Mr. Martin Wolfgang Johannes Rey (Rey) and Mr. Anand Prakash (Prakash) (SPA – 2).
In terms of Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024 (Combination Regulations), vide letters dated 31st January 2025 and 21st February 2025, certain information(s)/clarification(s) relevant for the purpose of assessment of the combination were sought from the Acquirer. The Acquirer submitted responses dated 17th February 2025 and 28th February 2025 after seeking an extension of time.
The Proposed Combination involves the proposed acquisition by the Acquirer of:
[(i) and (ii) collectively referred to as the “Intermediate Completion”].
[O2 Midco Acquisition-A, O2 Midco Acquisition-B, O2 Energy Acquisition and Intermediate Completion are collectively referred to as the Proposed Combination].
Accordingly, pursuant to the Proposed Combination, the Acquirer will acquire 100% shareholding of O2 Midco and O2 Energy, and the OPS Subsidiaries and O2 Energy Subsidiaries will become subsidiaries of the Acquirer [Hereinafter, Acquirer and Target are collectively referred to as Parties].
The Acquirer is the renewable arm and wholly owned subsidiary of JSW Energy Limited (JEL) (a listed entity), the power business arm of the JSW Group. As such it belongs to the JSW Group / Acquirer Group. The Acquirer, through its 100% owned subsidiaries, is currently operating renewable projects and is constructing a portfolio of ~2.3 GW of renewable energy assets in India for supply of power to Government utilities and captive consumers. The Acquirer is also engaged in the energy storage sector in India.
The JSW group refers to the JSW group of companies that are headed by Mr. Sajjan Jindal in the capacity of chairman and includes, JSW Steel Limited, JSW Cement Limited, JSW Paints Limited, JSW Energy Limited, JSW Infrastructure Limited, JSW Ventures, JSW Sports along with their respective subsidiaries and affiliates. JSW Group is a leading business conglomerate in India with an annual turnover of ~USD 24 billion having presence in various sectors including Steel, Energy, Infrastructure, Cement, Paints, Sports and Venture Capital.
O2 Midco/Target 2 is the legal and beneficial owner and holds 100% shareholding of OPS. OPS, in addition to holding 100% shareholding of O2 Energy, also holds legal and beneficial ownership of majority of the securities of various companies of the O2 Group (38 in number).
O2 Energy/ Target 1 holds the legal and beneficial ownership of the securities of various other companies of the O2 Group (27 in number). The Targets are engaged in renewable power generation activities primarily in wind and solar. They have a pan-India presence with various projects aimed at sale of power.
The OPS Subsidiaries and O2 Energy Subsidiaries are special purpose vehicles which own and operate various power plants / projects of the O2 group. O2 Group is defined as the group of renewable energy companies whose parent entity is O2 Power Pooling Pte. Ltd. (OPP). OPP, the ultimate parent entity of the Targets, belongs to (i) EQT group which holds 51% shareholding, and (ii) Temasek group which holds 49% shareholding in OPP. The EQT group and the Temasek group are international investment organisations and they will exit from OPP through the Proposed Combination which is consistent with their respective overall investment strategy.
For the purpose of overlap assessment, the activities of the Acquirer Group, Acquirer and Target (including their affiliates which meet the Materiality Thresholds) have been considered. It is submitted that the Acquirer Group is engaged inter alia in the production of thermal power, hydropower, solar power and wind power, while the Targets are also inter alia engaged in the generation of solar power and wind power but they do not generate power through thermal and hydropower sources. Considering their presence, it is observed that Parties are engaged in the business of power generation through renewable sources in India. Thereby, activities of the Acquirer Group and the Targets exhibit horizontal overlaps in the market for generation of solar power and wind power.
In addition to the above horizontal overlaps, the Parties exhibit potential vertical overlaps in the following markets:
In this context, reference may be made to the Order bearing No. F. No. 09/13/2021-RCM dated 22nd July 2022, issued by the Ministry of Power, Government of India. The said order inter alia prescribes the following with respect to renewable purchase obligation (RPO) and energy storage obligation:
So far as the Wind RPO is concerned, the same can only be met by energy produced from WPPs commissioned after 31st March 2022. Therefore, in this context the energy produced from WPPs commissioned after 31st March 2022 cannot be substituted by energy produced from other WPPs (i.e., WPPs commissioned before 31st March 2022). Therefore, it would be relevant to assess the horizonal overlaps considering the segmentation made by the RPOs. In the instant matter, within the renewable power generation segment, the activities of the Acquirer Group and the Targets exhibit (considering under construction and under development projects) horizontal overlaps with regard to generation of power from wind projects commissioned after 31st March 2022, and other renewable power sources. Neither the Acquirer Group nor the Targets are engaged in power generation through wind projects commissioned before 31st March 2022.
The Commission decides to leave the exact delineation of the relevant market open, as it was observed that the Proposed Combination is not likely to cause appreciable adverse effect on competition (AAEC) in any of the plausible horizontal and vertical relevant market(s) in India.
The combined market shares of the Acquirer Group and the Targets in the overall segment for power generation, power generation through renewable sources and its overlapping sub-segment are in the range of [0-5] % based on current capacity. Further, taking future capacity into consideration, the combined market shares of the Acquirer Group and the Targets for power generation through renewable sources would increase to [5-10] % and for its overlapping sub-segment would increase to [10-15] %. Further, each of these overlapping segments and sub-segments have presence of other players like Adani Green Energy Limited, Tata Power Company Limited, ReNew Power Private Limited, Azure Power Global Limited, Greenko Group etc.
With regard to the vertical linkages, the Commission observes that the Acquirer Group has an insignificant presence with a market share in the range of [0-5] % in the downstream markets for Power Transmission and for Power Trading with the presence of other credible players. Thus, given the limited presence of the Target in the upstream market and the Acquirer Group in the downstream market(s), there may be no possibility of foreclosure concerns in any of the markets.
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.
This order may stand revoked if, at any time, the information provided by Acquirer is found to be incorrect.
The information provided by Acquirer shall be treated as confidential in terms of and subject to the provisions of Section 57 of the Act.
The Secretary is directed to communicate to the Acquirer accordingly.
