Allowed

1. Highway Infrastructure Trust, 2. Galaxy Investments II Pte. Ltd. 3. Nebula Asia Holdings II Pte. Ltd.

CCI6 Aug 2024C-2024/05/1145

Case brief

AI extract

What is this about?

The Competition Commission of India disposed of a Notice under Section 6(2) proposed by Highway Infrastructure Trust, Galaxy Investments II, and Nebula Asia Holdings II regarding an acquisition of equity stakes. The Commission found no appreciable adverse effect on competition based on low market share and lack of vertical linkage, approving the combination under Section 31(1).

What did the court decide?

Commission approved the proposed combination under Section 31(1) of the Act.

1. Highway Infrastructure Trust, 2. Galaxy Investments II… — Intellectual Property | CCI (2024)

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COMPETITION COMMISSION OF INDIA

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Combination Registration No. C-2024/05/1145

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6^th August 2024

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Notice under Section 6(2) of the Competition Act, 2002 given by Highway Infrastructure Trust, Galaxy Investments II Pte. Ltd. and Nebula Asia Holdings II Pte. Ltd.

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CORAM:

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Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member

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Ms. Sweta Kakkad 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 15^th May 2024, the Competition Commission of India ( Commission ) received a Notice under Section 6(2) of the Competition Act, 2002 ( Act ) given by Highway Infrastructure Trust ( HIT / Acquirer Trust ), Galaxy Investments II Pte. Ltd. ( Galaxy II ), and Nebula Asia Holdings II Pte. Ltd. ( Nebula ) [Acquirer Trust, Galaxy II and Nebula are collectively referred to as Notifying Parties ].

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The Notice was filed pursuant to the execution of Master Securities Purchase Agreement, dated 15^th January 2024, executed amongst PNC Infratech Limited ( PNC Infratech/Seller 1) , PNC Infra Holdings Limited ( PNC Infra Holdings/Seller 2) , Acquirer Trust, Highway Concessions Private Limited ( HC One ) and PNC SPVs; and Identified Matters Management Agreement dated 15^th January 2024, executed amongst PNC Infratech, PNC SPVs, Acquirer Trust and HC One;

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Page 1 of 5

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Combination Registration Number: C-2024/05/1145

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The Proposed Combination envisages the acquisition of equity stake in 12 (twelve) PNC SPVs¹ of PNC Infratech and PNC Infra Holdings.

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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 letters dated 5^th June 2024 and 3^rd July 2024, certain information and clarifications were sought from the Notifying Parties. The response was submitted by the Notifying Parties on 27^th June 2024 and 17^th July 2024, respectively.

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The Acquirer Trust, is an irrevocable trust settled under the Indian Trusts Act, 1882, and is registered as an infrastructure investment trust with the Securities Exchange Board of India ( SEBI ) to carry out the activities prescribed under the SEBI (Infrastructure Investment Trusts) Regulations, 2014 ( InvIT Regulations ). The Acquirer Trust owns SPVs incorporated in India, which are engaged in the business of operating roads and highways in India for which the SPVs have been granted government concessions. The Acquirer Trust currently owns G6 Assets² , Udupi Tollway Private Limited ( UTPL ), three of the four HG Assets³ , and portions of Macquarie Assets⁴ (collectively referred to as Acquirer Trust Road Assets ).

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HC One is the investment manager of the Acquirer Trust in terms of the InvIT Regulations and discharges all obligations of an investment manager under the InvIT

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1 These include (i) PNC Bareilly Nainital Highways Private Limited ( PBNHPL ); (ii) PNC Chitradurga Highways Private Limited ( PCHPL ); (iii) PNC Aligarh Highways Private Limited ( PAHPL ); (iv) PNC Bundelkhand Highways Private Limited ( PBHPL ); (v) PNC Khajuraho Highways Private Limited ( PKHPL ); (vi) PNC Triveni Sangam Highways Private Limited ( PTSHPL ); (vii) PNC Rajasthan Highways Private Limited ( PRHPL ); (viii) PNC Bithur Kanpur Highways Private Limited ( PBKHPL ); (ix) PNC Unnao Highways Private Limited ( PUHPL ); (x) PNC Challakere (Karnataka) Highways Private Limited ( PCKHPL ); (xi) PNC Meerut Haridwar Highways Private Limited ( PMHHPL ); and (xii) PNC Gomti Highways Private Limited ( PGHPL ).

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2 Includes (i) Nirmal BOT Limited ( NBL ), (ii) Dewas Bhopal Corridor Private Limited ( DBCPL ), (iii) Godhra Expressways Private Limited ( GEPL ), (iv) Jodhpur Pali Expressway Private Limited ( JPEPL ), (v) Shillong Expressway Private Limited ( SEPL ), and (vi) Ulundurpret Expressways Private Limited ( UEPL ).

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3 Includes (i) Ateli Narnaul Highway Private Limited (formerly known as H.G. Ateli Narnaul Highway Private Limited) ( HGANHPL ), (ii) Rewari Ateli Highway Private Limited (formerly known as H.G. Rewari Ateli Highway Private Limited) ( HGRAHPL ), (iii) H.G. Rewari Bypass Private Limited ( HGRBPL ) (Acquirer Trust has executed the definitive documents for the acquisition of HGRBPL, the same has not yet been transferred to the Acquirer Trust); and (iv) Gurgaon Sohna Highway Private Limited ( GSHPL ).

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4 Includes (i) 56.8% of Gujarat Road and Infrastructure Company Limited ( GRICL ), and (ii) Swarna Tollway Private Limited ( STPL ).

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Page 2 of 5

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Combination Registration Number: C-2024/05/1145

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Regulations. Galaxy II is the sponsor of the Acquirer Trust, in terms of the InvIT Regulations. HC One is majority owned by Galaxy II, which is a special purpose vehicle indirectly majority owned by investment funds, vehicles and/or accounts advised and managed by KKR Co. & Inc ( KKR ). The Acquirer Trust is also stated to be indirectly controlled by KKR.

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Nebula is a special purpose vehicle and does not undertake any business activities. Nebula is indirectly majority owned by investment funds, vehicles, and/or accounts advised and managed by various subsidiaries of KKR Group. Nebula is currently a unitholder of the Acquirer Trust.

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The PNC SPVs, i.e. the Target, have entered into concession agreements with the National Highway Authority of India ( NHAI )/Uttar Pradesh State Highways Authority ( UPSHA ) for holding, developing, operating, and maintaining infrastructure projects under Hybrid Annuity Model ( HAM )/ Build-Operate-Transfer ( BOT ), respectively.

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Identification of Overlaps

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The Acquirers conducted an overlap assessment between the Acquirers, considering KKR as the ultimate parent entity, on one hand, and the Target Road Assets, on the other hand. Further, 2743298 Ontario Limited ( OTPP 2 ), a group entity of Ontario Teacher Pension Plan Board’s ( OTPPB ), having more than 10 percent unitholding of the Acquirer Trust’s investment manager, i.e. , HC One, along with certain rights, based on which OTPPB has also been considered for the overlap assessment, besides KKR.

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Competition Assessment

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Given the Commission’s decisional practice wherein each road asset is considered as a distinct relevant market, no horizontal overlap emerges from the presence of the Parties as regards them owning the road assets. There are no horizontal overlaps between the origin and destination pairs between the KKR Group’s Road Assets and OTPPB Road Assets, on one hand and the PNC SPVs on the other.

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Page 3 of 5

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Combination Registration Number: C-2024/05/1145

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It has been submitted that the SPVs of the Acquirer Trust directly manage operations and management (O&M) activities of their respective assets under the supervision of HC1 Project Manager Limited. Similarly, PNC SPVs only conduct O&M services on their own roads, i.e. , the O&M is captive in nature. Neither the Acquirer Trust’s road assets nor the PNC SPVs provide O&M services to third parties on a standalone basis. However, some of the PNC SPVs engage third party contractors to provide O&M services only to their own road assets. Accordingly, a potential vertical linkage has been examined for the presence of Target in the upstream segment of the market for O&M of highways in the road infrastructure sector in India and the Acquirer Trust’s presence in the downstream segment of the market for road assets on origin and destination pair basis.

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The combined market share of the Acquirer Trust Road Assets, OTPPB Road Assets and the PNC SPVs in the potential downstream market, on the basis of length of the road assets, is in the range of [0-5]%. Therefore, given the miniscule presence of the Parties, neither the Acquirer Trust along with OTTPB nor the PNC SPVs, possess the ability or incentive to cause foreclosure in any of the markets that have been examined.

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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 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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The order may be revoked if, at any time, the information provided by the Notifying Parties is found to be incorrect.

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

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Page 4 of 5

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Combination Registration Number: C-2024/05/1145

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The Secretary is directed to communicate to the Notifying Parties accordingly.

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Page 5 of 5

1. Highway Infrastructure Trust, 2. Galaxy Investments II Pte. Ltd. 3. Nebula Asia Holdings II Pte. Ltd.

Case brief

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1. Highway Infrastructure Trust, 2. Galaxy Investments II Pte. Ltd. 3. Nebula Asia Holdings II Pte. Ltd.

Case brief

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