Naspers Ventures B.V.

Page 1 of 5 COMPETITION COMMISSION OF INDIA (Combination Registration No.C-2023/11/1080) 30th January 2024 Notice under Section 6(2) of the Competition Act, 2002 filed by Naspers Ventures B.V 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 23rd 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 Naspers Ventures B.V. (Acquirer) for the proposed acquisition of additional shareholding of API Holdings Limited (Target) [Hereinafter, the Acquirer and Target are collectively referred to as ‘Parties’]. 2. The notice has been filed pursuant to the following agreements – (a) A joint binding term sheet (Joint Term Sheet) executed on 18th September 2023, (b) Offer dated 25th September 2023 (Offer Letter), (c) Warranty and indemnity letter dated 29th September 2023 (Warranty and Indemnity Letter), (d) The letter agreement dated 18th September Combination Registration No. C-2023/11/1080 Page 2 of 5 2023 (Letter Agreement), and (e) Agreed form of Restated Shareholders Agreement (Restated SHA) and Agreed form Side Letter to Restated SHA. 3. The proposed combination envisages, acquisition of (i) additional shares in the Target, and (ii) the additional rights in the Target, by way of participating in the Rights Issue contemplated by 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 07th December 2023, 15th December 2023 and 19th January 2024 sought certain information(s)/ clarification(s), inter alia, relating to the activities of the Parties and the responses to the same were received on 08th December 2023 and 29th January, 2024. 5. The Acquirer is a private company with its corporate seat in Amsterdam, the Netherlands. It is an investment holding company and its principal activity is to make investments by providing direct and indirect equity and debt funding. The Acquirer belongs to the Naspers Group, of which Naspers Ltd. (Naspers) is the ultimate parent company. The Acquirer is an indirect, wholly-owned subsidiary of Prosus N.V. (Prosus), which is, in turn, a direct subsidiary of Naspers. As of 30th September 2023, Naspers held 72.67% of the share capital (on a fully diluted basis) of Prosus. The Acquirer serves as the primary investment vehicle for investments by Prosus Ventures, the venture capital arm of Prosus. 6. The Naspers is a global consumer internet company and one of the leading technology investors in the world. Naspers has a primary listing on the Johannesburg Stock Exchange and a secondary listing on the A2X Exchange in South Africa. The Naspers group comprises: Media and internet interests in South Africa and Internet interests outside South Africa. In India, Naspers, through Prosus, has several minority and non-minority investments. (Acquirer Group) Combination Registration No. C-2023/11/1080 Page 3 of 5 7. The Target is the ultimate parent entity of the API group (Target Group). Target Group predominantly undertakes activities in relation to: (a) the wholesale (B2B) sale and distribution of drugs (including pharmaceutical products, medical devices and OTC products); and (b) diagnostics services. The Target does not, by itself, undertake any retail operations (through brick-and-mortar stores or online marketplaces), i.e., any retail sale of goods or services to the end-consumer. However, the Target (either through itself and/or its subsidiaries) owns and develops the intellectual property and technology for developing e-commerce platforms, including marketplaces for facilitating the sale of pharmaceuticals, medical devices and OTC products, it has licensed the operation of the ‘PharmEasy’ marketplace to a third-party, Axelia. The Target acquired a 19.99% equity stake in Aarman Solutions Private Limited which, in turn, holds 100% of the equity share capital of Axelia which holds a non-exclusive license to use the intellectual property and information technology in relation to the ‘PharmEasy’ platform and as such, operates the ‘PharmEasy’ platform. Thus, at present the Target indirectly holds a 19.99% shareholding in Axelia. 8. It is submitted that the parties exhibit horizontal overlaps in the market for (i) Wholesale (B2B) sale and distribution of OTC products and (ii) Retail sale of OTC products. Further, there are certain existing vertical and potential vertical relationships between the Parties in the provision of white-labelling and marketing of OTC products in India and manufacture of branded OTC products, at the upstream level and wholesale (B2B) sale and distribution and retail sale of OTC products, at the downstream level. 9. Based on the above, the Parties have submitted that relevant markets for Horizontal Overlaps may be defined as: (a) facilitation of retail sale of OTC products in India (Relevant Market I) and (b) wholesale (B2B) sale and distribution of OTC products in India (Relevant Market II). 10. Accordingly, for the existing vertical linkages the Parties have submitted that, the relevant upstream markets may be delineated as: (a) Provision of white-labelling and marketing of OTC products in India. (Upstream Market I) and (b) Manufacture of branded OTC Combination Registration No. C-2023/11/1080 Page 4 of 5 products (Upstream Market II) [Collectively referred as Upstream Markets]. Further the Parties have submitted that the relevant downstream markets for the Existing and Potential Vertical Linkages, may be delineated as: (a) Provision of facilitating retail sale of the OTC products (Downstream Market I) and (b) Provision of wholesale (B2B) sale and distribution of the OTC products for further onward sale (Downstream Market II) [Collectively referred as Downstream Markets]. 11. The Commission decides to leave precise delineation of the relevant market open, as it was observed that because of the reasons stated below, the Proposed Combination is not likely to result in any appreciable adverse effect on competition (AAEC) irrespective of the manner in which the relevant market is delineated. 12. Based on the submissions of the Parties, it is noted that the combined market shares of Parties in the Relevant Market I and II are in the range of [0-5] % in terms of value. Further, there are other players present such as Apollo Hospitals Enterprise Limited, Medplus Health Services Limited, Tata 1Mg (1Mg Technologies Private Limited) in the Relevant Market I and Keimed Private Limited, Entero Healthcare Solutions Limited, Hiveloop Technology Private Limited in Relevant Market II. 13. It is further noted that in the Upstream Markets, the market shares of the Parties in terms of value are insignificant. Further, in the Downstream Markets, the Parties have market shares in the range of [0-5] % in terms of value. Moreover, there are several other players present in each of the Upstream and Downstream Markets who will continue to pose competitive constraints to the Parties post the Proposed Combination. 14. 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 any AAEC in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act. Combination Registration No. C-2023/11/1080 Page 5 of 5 15. This order may stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect. 16. The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act. 17. The Secretary is directed to communicate to the Acquirer accordingly.