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Fair trade watchdog CCI has approved a deal involving transfer of Raheja firm Magna's hotel and retail businesses to another group firm Genext, saying the transaction would not raise competitive concerns as ultimate control would remain within the corporate family.
Magna Warehousing & Distribution, a subsidiary of Chalet Hotels Pvt Ltd, is engaged in retail and hotel business in Bengaluru, while Genext is into real-estate properties in Mumbai. Both the entities are promoted by Raheja family and Chalet Hotels.
In an order approving the transaction, the Competition Commission of India (CCI) observed that as much as 83.16% stake of Magna is held by Chalet and the remaining is held by the members and group companies of the Raheja family along with Chalet.
Further, the watchdog noted that Chalet holds 40% stake in Genext while the rest is held by members of the Raheja family. Chalet is also directly or indirectly owned and controlled by the members of the Raheja family.
"...The ultimate control over the business activities of the parties to the combination will remain with the Raheja family only," CCI said in an order dated May 22.
Accordingly the regulator noted that "the proposed combination is not likely to have an appreciable adverse effect on competition in India".
The board of directors at Magna and Genext had approved the scheme in March following which the companies had filed a notice with CCI seeking its approval in April.
