CCI gives green signal to stake sale in Standard Greases

The Competition Commission has cleared the proposed purchase of over 17 per cent stake of Standard Greases & Specialties by Alpha TC Holdings and Tata Capital Growth Fund I, saying the deal does not raise concerns of unfair business practices.
Tata Capital Growth Fund is part of financial services firm Tata Capital, while Alpha TC Holdings, a Singapore-based investment firm, is managed by Tata Capital Advisors.
The proposed deals involves acquisition of 17.36 per cent shareholding of the post issue equity share capital of Standard Greases & Specialties on a fully diluted basis.
Alpha TC Holdings and Tata Capital Growth Fund would each subscribe up to 8.68 per cent stake in the target company.

In an order released today, the Competition Commission of India (CCI) said that "the proposed combination is not likely to have appreciable adverse effect on competition in India".
The fair trade watchdog stated that while Alpha TC Holdings and Tata Capital Growth Fund are engaged in investment activities, Standard Greases & Specialties is into the business of manufacturing and processing of greases and lubricating oils.

"It is also observed that none of the portfolio companies of the acquirers is currently engaged in any activity relating to manufacturing of greases and lubricating oils in India," CCI said.
"Further...Presently, there is no horizontal overlap or vertical relationship between the business activities of Standard Greases & Specialties Ltd and any enterprise of the acquirers' group," CCI said.

Going by details in the order, the purchase of minority stake under the deal is for purely investment purposes.
Further, the rights conferred on Alpha TC Holdings and Tata Capital Growth Fund are largely investor protection rights with no control over the strategic commercial decisions of Standard Greases & Specialties.
The proposed deal was entered on June 20, this year, following which Alpha TC Holdings and Tata Capital Growth Fund had approached the Commission for its approval on July 18.