Fair trade watchdog CCI has given its green signal to Japanese firm Toshiba Corporation's proposed acquisition of certain assets of Vijai Electricals, saying the deal will not adversely impact competition.
As per the proposed deal, Toshiba Corp' subsidiary, Terra Transmission & Distribution India, would acquire the distribution transformers, the power transformers, and the switchgears businesses of Vijai for about USD 200 million (about Rs 1,230 crore).
In its order dated October 14, Competition Commission of India (CCI) said 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 under...The (Competition) Act.
CCI observed that the estimated share of Vijai in the electrical transmission and markets for distribution equipment, transformers and switchgear in India is small.
Consequently, CCI said the proposed share of Toshiba in these businesses after the acquisition "would be only marginal." It noted that Toshiba is presently not engaged in any such businesses in India.
Further, the fair trade watchdog noted that "there are already several major established players present in the field of manufacture of electrical transmission and distribution equipment in India."
Terra is cuurently not engaged in any business activity and has been incorporated by Toshiba for the purpose of acquiring the business assets from Vijai, the order said.
Toshiba had approached CCI after it had entered into a 'Business Transfer Agreement' with Vijai on September 6, 2013.
