Disposed

Sundaram Finance Limited, 21, Patullos Road, Chennai-600002, Tamil Nadu

CCI26 Jul 2019C-2019/06/670

Case brief

AI extract

What is this about?

The Competition Commission of India examined a notice regarding the proposed acquisition of Sundaram Finance Limited's shareholding in Sundaram BNP Paribas Home Finance Limited. Evaluating the transaction under Section 6 and Section 20 of the Competition Act, 2002, the Commission concluded the combination would not adversely affect competition.

What did the court decide?

Commission opined that the proposed combination is not likely to have an appreciable adverse effect on competition in India.

Sundaram Finance Limited, 21, Patullos Road, Chennai-600002… — Company and Corporate | CCI (2019)

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COMPETITION COMMISSION OF INDIA

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(Combination Registration No. C-2019/06/670)

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26^th July, 2019

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Notice under Section 6 (2) of the Competition Act, 2002 filed by Sundaram Finance

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Limited

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CORAM:

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Mr. Ashok Kumar Gupta Chairperson Mr. U.C. Nahta Member Ms. Sangeeta Verma Member Mr. Bhagwant Singh Bishnoi Member

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

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On 28^th June, 2019, the Competition Commission of India ( Commission ) received a notice under Section 6(2) of the Competition Act, 2002 ( Act ) filed by Sundaram Finance Limited ( SFL/Acquirer ) relating to its proposed acquisition of 49.9% equity shareholding in Sundaram BNP Paribas Home Finance Limited ( SHFL / Target ) from BNP Paribas Personal Finance SA ( BNPP ) ( Proposed Combination ). The notice was filed pursuant to the Share Purchase Agreement ( SPA ) dated 21^st June, 2019 executed inter alia between SFL and BNPP.

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The Commission issued letters dated 4^th July, 2019 and 15^th July, 2019, under Regulation 14 of the Competition Commission of India (Procedure in regard to transaction of business relating to combinations) Regulations, 2011 ( Combination

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Combination Registration No. C-2019/06/670

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Regulations ), to the Acquirer, whereunder it was required to furnish certain information. In response, the Acquirer filed its written submissions on 9^th July, 2019 and on 18^th July, 2019, respectively.

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SFL is a deposit-taking NBFC registered with the RBI. It is primarily engaged in financing purchase of commercial vehicles, cars, construction equipment and tractors. It accepts fixed deposits from public and also distributes a wide array of financial services/products. SFL is also stated to have presence in mutual funds, housing finance, general insurance and business process outsourcing, through its subsidiaries, associates and joint ventures.

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SHFL is a joint venture between the Acquirer and BNPP. It is a Housing Finance Company registered with National Housing Bank. It offers a range of housing finance products including home loans, home extension loans, home improvement loans, loans to buy land and loan against mortgage of property. It also accepts fixed deposits from public.

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The Acquirer presently holds 50.1 % of the equity shares in SHFL. However, as a result of the Proposed Combination, SHFL would become a wholly owned subsidiary of SFL.

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It is observed that SFL is not engaged in housing finance business in India except through SHFL. SFL distributes financial products including housing finance. Such distribution activity of SFL is vertically placed to the housing finance business of SHFL. However, the value of housing finance products, distributed by SFL, for other financial institutions has not been significant to raise any competition concern.

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Considering the facts on record, details provided in the notice given under subsection (2) of Section 6 of the Act and assessment of the proposed combination on the basis of factors stated in sub-section (4) of Section 20 of the Act, the

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Combination Registration No. C-2019/06/670

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Commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India.

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