Allowed

MacRitchie Investments Pte. Ltd., Singapore

CCI24 May 2018C-2018/05/567

Case brief

AI extract

What is this about?

The Competition Commission of India approved Macritchie Investment Pte. Ltd.'s acquisition of up to 21.3% of UST Holdings Limited. The Commission found no horizontal or vertical overlap and deemed the transaction unlikely to adversely affect competition.

What did the court decide?

The proposed combination is approved under Section 31(1) of the Competition Act, 2002.

MacRitchie Investments Pte. Ltd., Singapore — CCI (2018) — LawSathi Research

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COMPETITION COMMISSION OF INDIA

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(Combination Registration No. C-2018/05/567)

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Fair Competition For Greater Good

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24^th May, 2018

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Notice under sub-section (2) of Section 6 of the Competition Act, 2002 filed by Macritchie Investment Pte. Ltd.

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CORAM:

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Mr. Devender Kumar Sikri Chairperson Mr. Sudhir Mital Member Mr. U. C. Nahta Member

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Mr. Justice G. P. Mittal Member

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Legal representatives: M/s Shardul Amarchand Mangaldas & Co.

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Order under sub-section (1) of Section 31 of the Competition Act, 2002

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On 11^th May, 2018, the Competition Commission of India ( Commission ) received a notice under sub-section (2) of Section 6 of the Competition Act, 2002 ( Act ) given by Macritchie Investment Pte. Ltd. ( MRIPL or the Acquirer ). Approval of the Commission has been sought for MRIPL’s acquisition of up to 21.3% of the issued and paid-up capital of UST Holdings Limited ( UST or Target ), on a fully diluted basis and matters incidental thereto.

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The notice was given pursuant to the execution of a Share Subscription Agreement ( SSA ) by and between MRIPL and UST on 9^th May, 2018. Additionally, a Shareholders Agreement ( SHA ) was also executed between MRIPL, UST, the existing investor Group of UST i.e. Tricase Investment Holding Inc. and Advantec Holdings SA, and the Sajan Group comprising of Pillai Family Limited Partnership and Mr. Sajan Pillai. Under SHA, MRIPL would enjoy right, proportional to its shareholding, to nominate directors on the board of UST and veto rights in respect of certain matters

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Comb. Reg. No. C-2018/05/567 Page 1 of 3

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COMPETITION COMMISSION OF INDIA (Combination Registration No. C-2018/05/567)

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Fair Competition For Greater Good

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including commencement of new line of business, approval of annual business plan and change in key managerial positions of CEO, CFO and COO.

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In terms of Regulation 14 of The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 ( Combination Regulations ), vide letter dated 14^th May, 2018, MRIPL was required to provide certain information/document(s) by 17^th May, 2018. Accordingly, MRIPL filed its response on 17^th May, 2018.

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MRIPL is an investment holding company and does not engage in any business operation. It is a wholly-owned subsidiary of Seletar Investments Pte Ltd. ( Seletar ). Seletar is a wholly-owned subsidiary of Temasek Capital (Private) Ltd., which in-turn is a wholly-owned subsidiary of Temasek Holdings (Private) Ltd. ( Temasek ), which is an investment company based in Singapore. The portfolio companies of Temasek Group cover a broad spectrum of industries: financial services; telecommunications, media and technology; transportation and industrials consumer and real estate; life sciences and agribusiness; as well as energy and resources.

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UST, along with its subsidiaries, is engaged in providing Information Technology (IT) services - software development and support services worldwide. In India, UST is present through its subsidiaries.

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As per the information provided in the notice, UST would utilize a part of the total consideration to buyback certain securities issued pursuant to exercise of stock options held by certain employees and shareholders of UST. From MRIPL’s perspective, the proposed combination is a financial investment, which is taking place in its ordinary course of business.

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It has been contended in the notice that there is no horizontal overlap between MRIPL and UST. However, MRIPL and Temasek Group is found to have made investments in certain Indian companies that are engaged in providing solutions for placement consultancy, platform for online auction of used cars and secondary sale of automobile components, data centre services and cyber security service. Although these fall within the broad ambit of IT services, UST does not offer any of them. It is also observed that

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Comb. Reg. No. C-2018/05/567 Page 2 of 3

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COMPETITION COMMISSION OF INDIA (Combination Registration No. C-2018/05/567)

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Fair Competition For Greater Good

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the turnover of UST in India is relatively insignificant to raise any competition concern given that IT sector, in general, exhibits a high degree of innovation and dynamism.

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As regards vertical overlap, pursuant to the query raised by the Commission, MRIPL has confirmed that “there is no vertical relationship between the portfolio companies of Temasek Group, which generates revenue from India and any of the Indian subsidiaries of UST. Thus, it has been found that the business of the parties to the combination do not exhibit any vertical overlap.

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Considering the facts on record, details provided in the notice given under Section 6(2) of the Act and assessment on the basis of factors specified in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have an appreciable adverse effect on competition in India and therefore, the same is hereby approved in terms of Section 31(1) of the Act.

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This order shall stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect.

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The information provided by the Acquirer is confidential at this stage, in terms of and subject to the provisions of Section 57 of the Act.

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The Secretary is directed to communicate to the Acquirer accordingly.

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Comb. Reg. No. C-2018/05/567 Page 3 of 3

MacRitchie Investments Pte. Ltd., Singapore

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MacRitchie Investments Pte. Ltd., Singapore

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