The Competition Commission has cleared Mahindra and Mahindra's proposed 40 per cent stake sale in its seed potato business to Dutch group HZPC Holland, saying the deal does not raise concerns of unfair trade practices.
Under the proposed deal, HZPC subsidiary Participatie Maatschappij Buitenland will acquire 40 per cent shares of Mahindra Investments (International) Private Ltd -- part of Mahindra and Mahindra (M&M).
Following the stake buy, Mahindra Investments would operate as a joint venture company of M&M and Participatie in the ratio of 60:40 respectively. Both HZPC and Mahindra Investments are engaged in the business of producing and selling seed potato.
In an order dated June 6, the Competition Commission of India (CCI) said the "proposed combination is not likely to have an appreciable adverse effect on competition in India".
The fair trade watchdog observed that M&M produces and sells seed potato in India while HZPC is engaged in the business of seed potato across the world except in India.
"Accordingly, there is no horizontal overlap between them in their operations related to the seed potato business in India," the CCI said.
"Further, the seed potato market in India is largely unorganised with presence of wide spectrum of players," it added.
M&M is primarily engaged in the automobile business. It also has interests in agri-business, IT and consulting services.
A share purchase agreement was entered between the M&M, Mahindra Investments, HZPC and Participatie on April 23 following which they had approached CCI for an approval in May.
