Deepak Fertilizers and Petrochemicals Ltd as well as Zuari Agro Chemicals are looking to take over MCFL.
Capital market regulator Sebi, which had given go-ahead to the proposed stake purchase by Deepak Fertilizer and Zuari Group in MCFL, had ruled that their respective open offers can commence only after CCI nod.
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The open offers can start only within 12 working days after the CCI approval is received for the both the deals.
The copy of order filed on BSE by the Pune-based company says that the deal "is not likely to have appreciable adverse effect on competition in India".
The approval from the fair trade watchdog paves the way for Deepak Fertilizers to make an open offer to acquire further 26% stake in Mangalore Chemicals and Fertilisers Ltd (MCFL).
Under the deal, Deepak Fertilizers' subsidiary SCM Soilfert would acquire up to 26% shareholding in MCFL through an open offer in addition to 0.8% stake buy through open market. MCFL is part of Vijay Mallya's UB Group.
The CCI approval pertains to both transactions.
"It is observed that in the chemicals segment, the product portfolios of MCFL and DFPCL (Deepak Fertilizers and Petrochemicals Corporation Ltd) are different as the chemical products of MCFL are not substitutable with those of DFPCL and vice versa," the CCI order added.
Noting that the overlap between the two companies was restricted to the fertiliser segment, CCI also observed that Deepak Fertilizer did not manufacture urea while MCFL's share in that market was "minimal".
"Further, it is also noted that with respect to almost all their overlapping fertiliser products, the parties' presence is through trading only," the order said.
The battle for MCFL between Deepak Fertilizers and Zuari Group was triggered when the latter, in July 2013, bought about 24% stake in Vijay Mallya firm through open market. Later, Zuari group increased its stake to 16.43% in the same month.
Earlier this year, Deepak Fertilizers further hiked its shareholding in MCFL to 25.31% -- thereby triggering the mandatory open offer clause under Sebi norms.
In May, UB Group joined hands with the Zuari to ward off a hostile takeover bid by Deepak Fertilizers for MCFL.
Since Saroj Poddar-led Zuari group along with UB Group is looking to purchase 26% in MCFL, they have to make an open offer under Sebi rules.