2015 (4) TMI 271 - Commission - Indian Laws

Acquisition of power company - Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 - Held that - It is observed that as the Acquirers have only a small presence in power generation in India, the proposed acquisition of the Target SPVs by the Acquirers, is not likely to have any appreciable adverse effect on competition in India. Considering the facts on record and the details provided in the notice given under sub-section (2) of Section 6 of the Act and the assessment of the combination after considering the relevant factors mentioned in sub-section (4) of Section 20 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, the Commission hereby approves the proposed combination under sub-section (1) of Section 31 of the Act. - Acquisition approved.

Issues:
1. Notification of acquisition under the Competition Act, 2002.
2. Assessment of the Acquirers and their backgrounds.
3. Compliance with regulations and submission of required information.
4. Details of the Target Projects and proposed restructuring.
5. Classification of the proposed combination under Section 5(a) of the Act.
6. Evaluation of potential impact on competition in India.
7. Approval of the proposed combination under Section 31(1) of the Act.

Analysis:

1. The case involves the receipt of a notice under the Competition Act, 2002, regarding an acquisition agreement between multiple parties, triggering the Commission's review process. The notice was submitted by the Acquirers, detailing the agreement executed with a listed company engaged in power generation in India.

2. Detailed descriptions of the Acquirers were provided, including TAQA India's status as a subsidiary of an international energy group, Indo-Infra's ownership under a Canadian corporation managing pension funds, and IIF-II's registration as an Alternative Investment Fund in India with a focus on infrastructure investments. The background information on each entity was crucial for the Commission's assessment.

3. The Acquirers were instructed to rectify defects in their submissions per the Combination Regulations, highlighting the importance of compliance with procedural requirements. Despite initial deficiencies, subsequent responses were filed within the specified timelines, demonstrating adherence to regulatory directives.

4. Specifics regarding the Target Projects owned and operated by the listed company were outlined, with plans for internal restructuring and transfer to newly formed Special Purpose Vehicles (SPVs). The proposed acquisition of these SPVs by the Acquirers was a key aspect of the case, necessitating a thorough evaluation by the Commission.

5. The classification of the proposed combination under Section 5(a) of the Act was mentioned, indicating the relevance of this provision in determining the regulatory framework applicable to the transaction. This classification likely influenced the subsequent analysis of the potential competition impact.

6. The Commission assessed the potential impact of the proposed combination on competition in India, considering factors outlined in the Act. Given the limited presence of the Acquirers in the Indian power generation sector, it was concluded that the acquisition was not expected to significantly affect competition, leading to the approval of the combination under Section 31(1) of the Act.

7. The final decision approved the proposed combination while emphasizing compliance with other legal obligations and statutory requirements. A provision was included for the revocation of the approval in case of incorrect information provided by the parties, underscoring the importance of accuracy and transparency in such proceedings. The Secretary was tasked with communicating the decision to the Acquirers, finalizing the regulatory process.

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