Under the proposed deal, CSTT Co Holdings — an investment arm of textile firm RuYi — would acquire 49 per cent stake in a textile company to be incorporated by RIL as its wholly-owned subsidiary.
The subsidiary will house RIL’s textile business.
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The combination also involves licensing of the ‘Georgia Gullini’ trademark by Gullini Fashions Private Ltd — an Indian arm of China-based textile firm RuYi.
Further, RIL’s trademark Vimal would be licensed to the textile company.
Textile happens to be founding business of $75-billion RIL group, which has since emerged as a major player in energy and retail businesses and is now expanding considerably into telecom arena as well, among others.
In an order released on Thursday, the CCI said “the proposed combination is not likely to have an appreciable adverse effect on the competition in India”.
According to the Commission, RIL and RuYi have an overlap in men’s shirting, suiting and trouser fabric and in the men’s readymade trouser segments of the textile industry.
“It is observed in all these segments, the share of both RuYi and RIL is insignificant and numbers of other players are present,” CCI said.
“As regards to the vertical relationship between RIL and RuYi, it is observed the same is insignificant and unlikely to give rise to competition concerns,” it added.
The textile division of RIL is into manufacture yarn, fabric for men’s suiting, trousers and shirting, among others.
On January 7, the CCI had received a CSTT Co Holdings received a notice seeking the regulator's nod on the deal.