1. SynthiMed Labs Private Limited 2. Ind Swift Laboratories Limited

COMPETITION COMMISSION OF INDIA

Combination Registration No. C-2023/10/1069

19^th December 2023

Notice under Section 6(2) of the Competition Act, 2002 jointly given by Synthimed Labs Private Limited and Ind Swift Laboratories Limited

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CORAM:

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Ms. Ravneet Kaur Chairperson

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Mr. Anil Agrawal Member

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Mr. Deepak Anurag Member

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

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On 20^th October 2023, the Competition Commission of India ( Commission ) received a Notice under Section 6(2) of the Competition Act, 2002 ( Act ), jointly given by Synthimed Labs Private Limited (Synthimed) and Ind Swift Laboratories Limited (Ind Swift) (collectively, “ Acquirers ”). The Notice was filed pursuant to the execution of, inter alia , (i) Business Transfer Agreement dated 6^th September 2023 entered by and between Synthimed, Ind Swift, and certain promoter shareholders of Ind Swift ( Ind Swift BTA ); (ii) Business Transfer Agreement dated 6^th September 2023 entered by and between Synthimed, Essix Biosciences Limited ( Essix ), and certain promoter shareholders of Essix ( Essix BTA ); and (iii) a Shareholders’ Agreement dated 6^th September 2023 entered by and between Synthimed, Ind Swift, and other shareholders of Synthimed ( Synthimed SHA ).

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Combination Registration No. C-2023/10/1069

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The Notice relates to the proposed slump sale of certain identified business undertakings (on a going concern basis) by Ind Swift ( Business 1 ) and by Essix ( Business 2 ) to Synthimed and the acquisition of shareholding of 8.42 percent (on a fully diluted basis) in Synthimed by Ind Swift ( Proposed Combination ). Business 1 includes (i) Active Pharmaceutical Ingredients ( APIs ) manufacturing plants located at Dera Bassi, Punjab, and Samba, Jammu and Kashmir, and (ii) a contract research and manufacturing services ( CRAMS ) and a research & development ( R&D ) facility at Mohali, Punjab in terms of the Ind Swift BTA. Business 2 includes an intermediates ( IMDs ) manufacturing plant at Dera Bassi, Punjab in terms of Essix BTA (Business 1 and Business 2 collectively constitute “ Target Business ”).

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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 13^th November 2023 ( RFI ), sought certain information and clarifications regarding, inter alia , details of businesses proposed to be transferred by Ind Swift and Essix to Synthimed, terms of shareholding of Ind Swift in Synthimed etc. The Acquirers submitted their response on 30^th November 2023 after seeking an extension of time ( Response to RFI ). The Acquirers submitted certain additional information/clarifications with respect to Response to RFI on 6^th December 2023.

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Synthimed is a recently incorporated company set up to facilitate the Proposed Combination. The entire shareholding of Synthimed is held by two directors of Synthimed in their individual capacity. These shareholders will subsequently transfer their entire interest in Synthimed to the Investors ( i.e. , India Resurgence Fund Scheme – 1 and India Resurgence Fund Scheme – 2). The Investors are schemes launched by India Resurgence Fund ( IndiaRF ), which is a Category II Alternative Investment Fund acting through its investment manager - India Resurgence Asset Management Business Private Limited ( IndiaRF Manager ). IndiaRF Manager is a 50:50 joint venture between Bain Capital Mauritius ( BC Mauritius ), which forms part of Bain Capital Group, and Piramal Enterprises Limited ( PEL ), which forms part of Piramal

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Combination Registration No. C-2023/10/1069

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Group. Thus, Synthimed forms part of the Bain Capital Group and Piramal Group (collectively, “ Acquirer Groups ”).

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Ind Swift and Essix are under the common control of Mr. NR Munjal, Rishav Mehta, Himanshu Jain, and their family members (“ Mehta / Munjal / Jain Family "). Ind Swift is a public listed company primarily engaged in the business of manufacturing and selling APIs and IMDs, providing CRAMS, and supporting R&D. Essix is engaged in the manufacture and sale of IMDs.

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The Commission observed that the activities of the Target Business form part of the broader pharmaceuticals sector. The supply chain in the pharmaceutical sector starts with the manufacture of APIs which are the key/primary molecules used in the making of any drug. IMDs are the by-products of reactions in the API production process. Each reaction in the production process may produce several IMDs which can then be used as precursors for other APIs. Pharmaceutical companies may either manufacture APIs themselves or purchase them. Using APIs, pharmaceutical companies manufacture Finished Dosage Formulations ( FDFs ), consumed by end-consumers. Recent years have also seen the emergence of global CRAMS. CRAMS are provided by third parties that manufacture APIs and/or FDFs under contract on behalf of pharmaceutical companies, under their brand name.

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Considering the supply chain in the pharmaceuticals sector, the Commission noted that an entity, by the name of Piramal Pharma Limited ( Piramal Pharma ), which forms part of Piramal Group, is also engaged in the manufacture and sale of APIs, FDFs, etc. As the same implies the possibility of horizontal overlaps and/or vertical linkages between the activities of Acquirer Groups and Target Business, the Proposed Combination was further assessed accordingly.

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The Commission observed that the Target Business is primarily engaged in the sale of APIs and IMDs; and the provision of CRAMS, outside of India, and its India presence is limited to the manufacture and sale of APIs and IMDs and based on the information

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Combination Registration No. C-2023/10/1069

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given by the Acquirers, the horizontal overlaps between the activities of Piramal Pharma and Target Business were narrowed down to the segment of APIs.

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As APIs are the primary inputs used in the manufacture of formulations, each API potentially constitutes a separate relevant market as an entity manufacturing a given formulation will necessarily require the specific APIs required to create the formulation. In these terms, the only common/substitutable API manufactured by the Acquirer Groups and Target Business is Cinacalcet Hydrochloride API. However, Piramal Pharma uses Cinacalcet Hydrochloride API for captive consumption only (i.e., to manufacture the FDF for export on a CRAMS basis). Further, considering the estimates submitted by the Acquirers, the sales of Cinacalcet Hydrochloride API made by Target Business in India constitutes less than 5% of the total volume of sales of Cinacalcet Hydrochloride API in India and thus the presence of Target Business in India in this segment is also limited and appears insignificant to cause any change in market dynamics.

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As Piramal Pharma is also engaged in the manufacture and sale of FDFs in India, it uses certain APIs as inputs in the production process, the Commission assessed whether the respective APIs and FDFs of the Target Business and the Acquirer Groups exhibit potential vertical/complementary linkages in India. In this regard, the Acquirers submitted that the Target Business does not engage in the sale of any API that is used or could be used by Piramal Pharma to manufacture FDFs sold in India. Accordingly, the Proposed Combination is not likely to adversely change the market dynamics at any vertical level in the pharmaceutical supply chain in India.

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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.

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Combination Registration No. C-2023/10/1069

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

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The information provided by the Acquirers shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

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The Secretary is directed to communicate to the Acquirers accordingly.

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1. SynthiMed Labs Private Limited 2. Ind Swift Laboratories Limited

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1. SynthiMed Labs Private Limited 2. Ind Swift Laboratories Limited

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