Acquisition of Equity Shares in TM International Logistics Limited by Tata Steel Limited

ANNEXURE 25

SUMMARY OF THE PROPOSED TRANSACTION

[In terms of regulation 13(2) of the Competition Commission of India (Combinations) Regulations, 2024]

Name of the parties to the combination

1. The parties (“Parties”) to the Proposed Transaction are:
   • Tata Steel Limited (“Tata Steel” / “Acquirer”);
   • TM International Logistics Limited (“TMILL” / “Target”); and
   • IQ Martrade Holding Und Management GmbH (“IQ Martrade” or “Seller”).

Nature and purpose of the combination

2. The Proposed Transaction (defined below) pertains to the acquisition by Tata Steel of the entire shareholding comprising twenty-three per cent (23%) equity shares held by one of the existing joint venture partners, i.e., IQ Martrade in TMILL, and the consequent exit of IQ Martrade from TMILL for a consideration of up to Indian Rupee Three Hundred and Thirty-Five Crore (INR 335 Crores), subject to applicable withholding tax.

3. Post consummation of the Proposed Transaction, IQ Martrade shall cease to be a shareholder of TMILL, and Tata Steel and NYK (Europe) B.V. (“NYK Europe”) shall hold 74% and 26% equity shareholding in TMILL, respectively.

(collectively defined as (“Proposed Transaction”))

4. The Proposed Transaction is, in substance, a simplification and internal consolidation of an already existing and longstanding commercial relationship between Tata Steel Group and TMILL and represents the continuation of a predominantly captive and operationally integrated commercial arrangement that has existed historically between Tata Steel and TMILL.

Products, services and business(es) of the parties to the combination

Tata Steel Limited

5. Tata Steel is a public limited listed entity, incorporated under the Companies Act, 1882, and is a company under the Companies Act, 2013, having its corporate identification number as L27100MH1907PLC000260. It is engaged in integrated steel manufacturing operations, ranging from mining to steelmaking to further processing. It is listed on the Bombay Stock Exchange (“BSE”) and the National Stock Exchange (“NSE”). It has 127 subsidiaries, 22 joint ventures and 17 associate companies.

TM International Logistics Limited

6. TMILL is a public limited company, incorporated under the Companies Act, 1956, and is a company under the Companies Act, 2013, having its corporate identification number as U63090WB2002PLC094134. TMILL was established in 2002 as a 51:49 joint venture between Tata Steel and IQ Martrade. Subsequently, in 2009, IQ Martrade sold 26% of its equity shares to NYK Europe, and as on date TMILL is a 51:23:26 joint venture between Tata Steel, IQ Martrade and NYK Europe, respectively.

7. TMILL was incorporated as a joint venture primarily to cater to the logistics and cargo transportation requirements of Tata Steel,. and Tata Steel continues to be TMILL’s majority shareholder and anchor customer.

8. TMILL has developed its business substantially around servicing Tata Steel’s operational and transportation requirements across various segments of the logistics value chain, including:

   • railway cargo transportation services;
   • port operation and cargo handling services;
   • freight forwarding and other value-added logistics services.

Respective markets in which the parties to the combination operate

9. A vertical relationship exists between the Parties in relation to: (i) Railway Cargo Transportation Services; (ii) Port Operation Services; and (iii) Freight Forwarding Services (collectively, “Relevant Markets”) provided by TMILL. Accordingly, the aforementioned upstream services are identified as the Relevant Markets.

10. As regards the potential downstream activity, it is submitted that the logistics and transportation services provided by TMILL may be utilised for the movement of a wide range of goods and such services are not specific to any particular product, industry or business segment. Accordingly, the Parties have not identified any distinct downstream market for the purposes of assessing the limited vertical linkages arising from the Proposed Transaction.

11. It is submitted that the definition of the Relevant Markets may be left open. Regardless of the precise delineation, the Proposed Transaction does not result in any material change in the competitive landscape in India, as it merely enables exit of IQ Martrade as an existing JV partner.

12. The Proposed Transaction does not result in the acquisition of any competing business, does not create any new vertical or complementary relationship, does not add any material market share, capacity, infrastructure, customer base, or commercial capability, and does not alter the existing incentives of the Parties. The identified vertical linkages have existed for several years and will continue in substantially the same manner following consummation of the Proposed Transaction. Given TMILL's miniscule market shares, Tata Steel's continued reliance on multiple third-party logistics providers, the presence of numerous competing service providers, and the absence of any ability or incentive to engage in foreclosure, the Proposed Transaction does not and is not likely to cause an appreciable adverse effect on competition in any market in India. Accordingly, it is humbly submitted that the Proposed Transaction may be approved.

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