Fair trade regulator CCI has given its nod to the proposed Rs 1,575-crore acquisition of nutrition business of Wockhardt Group by dairy major Danone.
Under the arrangement, Danone would acquire Wockhardt's nutrition business and brands as well as related industrial operations handled by its subsidiary Carol Info Service for approximately 250 million euros (about Rs 1,575 crore).
"Considering the facts on record and the details provided ...And the assessment of the proposed combination, 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 Commission hereby approves the proposed combination," the CCI said in its order.
The Commission said that since in India, Danone's presence is limited to activities relating to bottled water, pro-biotic drinks and fresh products, its acquisition of Wockhardt, which is engaged in manufacturing and selling pharmaceutical, nutraceutical and biotech products, could not been seen as a concern for other players.
"Danone Group has no presence in India in any activity that either competes or is vertically related to any of the businesses proposed to be acquired...Given the significant presence of other players in the baby food and medical nutrition business in India, the proposed combination is not likely to have any significant competition concern," CCI said.
Wockhardt owns brands like Farex, Protinex, Dexolac and Nusobee.
The proposed combination would transfer the nutrition business relating to protein-based supplement products, in-licenced pre-biotic and pro-biotic products, and child nutritional products of Wockhardt Group to G&K and Danone Asia Pacific, group companies of Danone SA.
As per the competition law effective from June 1, the high-value deals need to have clearance of the monopoly watchdog CCI. The merger deals will come under the CCI radar if the combined turnover of the two companies is Rs 4,500 crore and above.
Also, companies with a turnover above the threshold of Rs 1,500 crore where the companies have combined assets of Rs 1,000 crore or more, or a combined turnover of Rs 3,000 crore or more, will have to approach the CCI.
Also, the target company's net assets have to be a minimum of Rs 200 crore or it should have a turnover of Rs 600 crore for CCI intervention.