Mitsui & Co., Ltd.

COMPETITION COMMISSION OF INDIA Combination Registration No. C-2024/05/1150

25th June 2024

Notice under Section 6(2) of the Competition Act, 2002 given by Mitsui & Co., 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

1. On $17^{\text{th}}$ May 2024, the Competition Commission of India (Commission) received a notice (Notice) under Section 6(2) of the Competition Act, 2002 (Act), given by Mitsui & Co., Ltd. (Mitsui/Acquirer).

2. The Notice was filed pursuant to the Share Subscription and Purchase Agreement (SSPA) dated $21^{\text{st}}$ March 2024, executed amongst the Acquirer, Sneha Farms Private Limited (Sneha Farms/Target), and the Promoters$^1$ of Target; and Shareholders' Agreement (SHA) dated $21^{\text{st}}$ March 2024, executed amongst the Acquirer, Target, Promoters, Existing Shareholders$^2$ and Mr. Varun Reddy Dendi. ('Acquirer' and 'Target' are collectively referred to as the Parties).

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$^1$ The promoters of Sneha Farms are Mr. Dendi Ram Reddy and Sneha Villas Private Limited. $^2$ The Existing Shareholders of Sneha Farms are Dendi Anuradha and Dendi Sneha.

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Combination Registration No. C-2024/05/1150

3. The proposed combination relates to the acquisition of 25.01% of the total equity share capital of Sneha Farms through a combination of primary subscription and secondary purchase on a fully diluted basis (Proposed Combination).

4. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011, vide letter dated $31^{\text{st}}$ May 2024, certain information and clarifications were sought from the Acquirer. The Acquirer submitted its response vide communication dated $7^{\text{th}}$ June 2024.

5. Mitsui is a general trading company with a diversified business and investment portfolio. It has offices and overseas trading affiliates in many countries and regions. It is listed with the Tokyo Stock Exchange and is engaged in various business areas such as mineral and metal resources, energy, infrastructure projects, chemicals, iron & steel products, food & retail management, and IT & communication. It is the ultimate holding company of its group. In India, Mitsui, through its affiliates, undertakes various activities, including the manufacturing of steel products, automotive components and vehicles, raw material procurement and chemical processing, manufacture and sale of agriculture related products (including fish feed, as well as agricultural machinery), etc.

6. Sneha Farms is a private limited company, incorporated in the year 1994. It has two subsidiaries, namely, Sneha Gold Proteins Private Limited (Sneha Gold) and Singh Poultry Private Limited (Singh Poultry). Sneha Farms (and its subsidiary Singh Poultry) primarily operates within the poultry industry in India, covering a range of activities from poultry breeding to product distribution, including the maintenance of hatcheries, manufacturing of poultry feed and pre-mixes, processing of frozen and chilled chicken, production of ready to cook, ready to eat, and marinated poultry products, etc. It is also engaged in the production of fish feed, pet food, and various edible and non-edible oils and their by-products. Additionally, it operates a network of outlets for fresh poultry and fish.

7. With regard to Sneha Gold, it has been submitted that it is yet to commence business operations.

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Combination Registration No. C-2024/05/1150

8. The Commission noted that the activities of Mitsui (through its affiliates) and Sneha Farms (including its subsidiaries and affiliates) exhibit (i) horizontal overlap in the segment for manufacture and sale of fish feed in India and (ii) potential vertical linkages in the segment for manufacture and sale of feed additives in India (Upstream segment); and the segment for manufacture and sale of animal feed in India (Downstream segment). The Commission observed that considering the nature and extent of aforesaid overlaps/linkages and competition assessment given in the subsequent paragraph, the Proposed Combination is not likely to cause a change in market dynamics in any of the plausible markets that could be delineated and accordingly, decided to keep the definition of relevant market open.

9. The combined market shares of Parties in the segment for manufacture and sale of fish feed in India is in the range of [0-5%] in terms of volume and value. Further, the fish feed sector in India is characterized by the presence of several large players throughout the country like Avanti Feeds Limited, CPF (India) Private Limited, Devi Fisheries Limited, Cargill India Private Limited, Growel Feeds Private Limited etc. With regard to the vertical linkages/overlaps, Sneha Farms has less than 1% market share in the Downstream segment, which is characterized by other large players such as Godrej Agrovet Limited, Cargill India Private Limited, Suguna Foods Private Limited, Japfa Comfeeds India Private Limited, etc. Mitsui through its affiliate also has market share in the range of [0-5%] in the Upstream segment, which is characterized by other large players such as Alltech Biotechnology Private Limited, Addiseo Animal Nutrition Private Limited, DSM Nutritional Products India Private Limited and Ayurvet Limited, etc.

10. 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, approves the Proposed Combination as per the provisions of Section 31(1) of the Act.

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Combination Registration No. C-2024/05/1150

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.

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