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The Competition Commission of India approves the proposed combination involving the share acquisition and control of ITD Cementation India Limited by Renew Exim DMCC, along with an open offer under SEBI regulations. The Commission determines that the combination is not likely to cause an appreciable adverse effect on competition in India. The order remains subject to revocation if the provided information is found to be incorrect at any time.
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COMPETITION COMMISSION OF INDIA Combination Registration No.C-2024/11/1211
28th January 2025
Notice under Section 6(2) of the Competition Act, 2002 given by Renew Exim DMCC.
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
On $19^{\text{th}}$ November 2024, 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 Renew Exim DMCC (Acquirer). The Notice has been given pursuant to execution of: (a) Share Purchase Agreement dated $25^{\text{th}}$ October 2024 executed between Italian-Thai Development Public Company Limited (Seller) and the Acquirer; (b) public announcement dated $25^{\text{th}}$ October 2024 (PA), and detailed public statement published on $4^{\text{th}}$ November, 2024 (DPS) in relation to the Open Offer pursuant to and in compliance with the requirements of the Securities and Exchange Board of India (SEBI) (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (as amended) (Takeover Regulations); and Draft Letter of Offer dated $11^{\text{th}}$ November 2024 to the SEBI.
The Proposed Combination entails the following:
In terms of Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024 (Combination Regulations), vide letter dated $2^{\text{nd}}$ December 2024 certain information and clarifications relevant for the purpose of assessment of the combination were sought from the Acquirer. The partial responses to the same were received on $3^{\text{rd}}$ January 2025 and $13^{\text{th}}$ January 2025 and the complete response was received on $21^{\text{st}}$ January 2025.
The Acquirer is a Dubai based holding company involved in the business of investment in commercial enterprises and management. It does not have any business operations/presence in India and it belongs to the Adani group. 100% of the shareholding of the Acquirer is held by Valiant Investment DMCC, a Dubai incorporated company. Valiant Investment DMCC is held by Acropolis Trade and Investment Limited, Mauritius and it is in turn held by various holding entities. Further, the Acquirer belongs to Adani Group as the ultimate beneficial ownership of Valiant Investment DMCC and Acropolis Trade and Investment Limited is held by certain members of Adani family. Adani Group is an Indian multinational conglomerate comprising of eleven publicly traded companies. The promoter and promoter group shareholders of Adani Group's enterprises are individuals that are part of Adani family and / or entities ultimately owned and / or controlled by such individuals.
ITD Cementation India Limited (Target) is a publicly listed company on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Seller is the promoter company of the Target and currently holds 46.64% shareholding in the Target, whereas the remaining shareholding is currently held by various public shareholders. In India, Target is an engineering and construction company undertaking heavy civil, infrastructure and engineering, procurement and construction (EPC) business and operating in India with an established presence and expertise in EPC for maritime structures, mass rapid transit systems (MRTS), airports, hydro-electric power, tunnels, dams & irrigation, highways, bridges & flyovers, industrial structures and buildings, water & wastewater and foundation & specialist engineering. [Hereinafter, Acquirer and Target are collectively referred to as Parties].
It is observed that there are no horizontal overlaps between the Acquirer (including Adani Group and its affiliates) and the Target (including its downstream affiliates). However, certain affiliates of Adani Group are present in provision of Operation and Maintenance (O&M) in downstream vertical markets (maritime projects, roads and highways, power generation, airports and water and wastewater treatment plants) while Target is present in provision of EPC services across various segments such as in roads /highways, water and waste water treatment plants, airports, maritime projects and power projects i.e., input EPC services at the upstream level that may be required for Adani Group's activities of O&M at the related downstream levels for each activity / sector. Further, Adani Group entities' business of manufacturing cement also exhibits a vertical overlap with the Target's business of provision of EPC services in the infrastructure sector. Accordingly, Parties have submitted that the relevant upstream and downstream markets may be delineated as follows:
The Commission observed that, considering the nature and extent of aforesaid overlaps and the competition assessment given in the subsequent paragraph, the Proposed Combination is not likely to cause appreciable adverse effect on competition in any of the plausible markets that could be delineated and accordingly, decided to keep the exact delineation of relevant market open.
The market shares of the Target in the Upstream Market 2, Upstream Market 3, and Upstream Market 4 are in the range of [0-5] % in each of these segments. On the other hand, Adani Group has market shares in the range of [0-6] % in Downstream Market 2 and Downstream Market 3. In the Downstream Market 1 and Upstream Market 6, the market share of Adani Group is the range of [15-20] %, however, the Target has limited presence in the Upstream Market 1 and Downstream Market 6 with market shares in the range of [0-5] %. In the Upstream Market 5, the Target has market share of less than 8%, however, Adani Group has miniscule presence with less than 1% market share in the Downstream Market 5. Further, each of these market segments are characterised with the presence of several competitors.
Given the aforesaid presence of the Parties and/or their affiliates in the vertically overlapping markets and the competition landscape of the upstream and downstream markets, coupled with the presence of credible players in each of the market segments, it appears that the Parties do not possess the ability or incentive to cause foreclosure 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.
The order may stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect.
The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.
The Secretary is directed to communicate to the Acquirer accordingly.
