Shriram LI Holdings Private Limited

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Page 1 of 4 COMPETITION COMMISSION OF INDIA (Combination Registration No. C-2023/11/1075) 16th January 2024 Notice under Section 6(2) of the Competition Act, 2002 jointly given by Shriram LI Holdings Private Limited and Shriram Life Insurance Company Limited 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 8th November 2023, the Competition Commission of India (‘Commission’) received a Notice under Section 6(2) of the Competition Act, 2002 (‘Act’) given by Shriram LI Holdings Private Limited (‘SLIH’). The Notice was filed pursuant to the approval of the Board of Directors of SLIH and Shriram Life Insurance Company Limited (‘SLIC’) (collectively, “Parties”) of the Scheme of Amalgamation (‘Scheme’), which envisages merger of SLIH with SLIC (‘Proposed Combination’). During the course of review of the Proposed Combination, the Parties, considering that the Proposed Combination envisaged merger of SLIH with SLIC, furnished requisite documents for SLIC to also be considered as a joint notifying party along with SLIH. The Scheme was approved by the Board of Directors of SLIC and SLIH respectively on 9th August 2023 and 10th August 2023. Pursuant to the Proposed Combination, SLIH will be merged with SLIC and SLIC shall continue to function under the name and style of SLIC carrying on the business of life insurance, as carried on by it prior to the Scheme. Combination Registration No. C-2023/11/1075 Page 2 of 4 2. In terms of Regulations 14(3) of the Competition Commission of India (Procedure in regard to the transaction of business related to combinations) Regulations, 2011 (‘Combination Regulations’), the Commission, vide letter dated 23rd November 2023 (‘RFI’), sought certain information and clarifications regarding, inter-alia, shareholding/control of SLIH/SLIC, presence of their affiliates, etc. The Parties submitted part response on 20th December 2023 and complete response on 29th December 2023 after seeking an extension of time (‘Response to RFI)’. The Parties also made certain additional submissions on 4th January 2024. 3. SLIH and SLIC are both part of the ‘Shriram Group’ of companies, which is, inter-alia, engaged in four different lines of businesses/verticals namely: (i) Financial Lending (ii) General Insurance (iii) Life Insurance, and (iv) Financial Services. Shriram Capital Private Limited (‘SCPL’) is the overarching holding arm of the financial services entities of the Group. The shareholders of SCPL, include Shriram Ownership Trust (‘SOT’), Shriwell Trust, and Sanlam Emerging Market (Mauritius) Limited (‘SEMM’) amongst others. The details of shareholding and activities of each of the Parties are as under: i. SLIH is held, inter-alia, by SCPL, SOT, Piramal Enterprises Limited (‘PEL’), and TPG India Investments II Inc., Mauritius (‘TPG’). SLIH is an unregistered Core investment Company with the main objective of undertaking investment business. ii. SLIC is held, inter-alia, by SLIH and SEMM. SLIC is a life insurance company, registered with IRDAI and engaged in the business of effecting contracts of insurance upon human life, develop and market a variety of products in the life insurance business, unit-linked life insurance products, and any other activity within the ambit of provisions of Insurance Act, 1938. 4. Based on the aforesaid, it is observed that apart from the Shriram Group entities, the other (direct/indirect) significant shareholders of the Parties include SEMM, PEL, and TPG. The Commission observed that the Proposed Combination is primarily an intra-group restructuring involving the entities forming part of the Shriram Group. As regards the Combination Registration No. C-2023/11/1075 Page 3 of 4 presence of other significant shareholders, the Scheme envisages the issue of shares of SLIC to the shareholders of SLIH in proportion to their respective holdings in SLIH. Further, as submitted, the Proposed Combination does not envisage a change in the rights of any of the shareholders at least at this stage. Accordingly, in the absence of any significant change in the control over the Parties/businesses, the Proposed Combination is not likely to cause any significant change in competition dynamics. 5. The Commission observed that the Proposed Combination is not likely to cause any change in competition dynamics even in terms of market assessment considering the presence of the significant shareholders in related markets as the same is insignificant to cause any change in competition dynamics as detailed in the ensuing paragraphs. 6. As submitted, SEMM has no direct/indirect shareholding in any business activity which can be considered as linked to the activities of SLIC in horizontal, vertical, or complementary aspects. PEL Group has a presence in the provision of life insurance services through Pramerica Life Insurance Limited (‘Pramerica’) and TPG’s certain affiliates are engaged in the activity of distribution of insurance products which can be considered as a vertical linkage (‘TPG Affiliates’). 7. Accordingly, the Commission assessed the Proposed Combination in terms of impact on competition dynamics in the product segments of life insurance horizontally and vertical linkages within the value chain of insurance products in the form of activities of life insurance and that of distribution of insurance products. However, for the reasons given in the ensuing paragraphs, the Proposed Combination is not likely to result in any appreciable adverse effect on competition in any of the plausible markets that could be delineated, and accordingly, the question of the exact delineation of the relevant market(s) is left open. 8. The combined market share of SLIC and Pramerica in the life insurance segment is less than one (1) percent which is insignificant to cause any change in competition dynamics. Further, the combined market share of TPG Affiliates in the segments of distribution of insurance products or narrower segment of distribution of life insurance products is Combination Registration No. C-2023/11/1075 Page 4 of 4 estimated to be less than one (1) percent and less than two (2) percent respectively, which is also insignificant to cause any change in competition dynamics seen on a standalone basis or seen together with the presence of Pramerica and SLIC in the life insurance segment. 9. 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 appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act. 10. The order may be revoked if, at any time, the information provided by the Parties is found to be incorrect. 11. The Secretary is directed to communicate to the Parties accordingly.