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Competition watchdog, the Competition Commission of India (CCI) has cleared the proposed takeover of laminates division of the Wadia Group firm Bombay Burmah Trading Co by Japan-based Aica Kogyo for an estimated Rs 100 crore.
In its order, which was passed in less than a month, the CCI said the combination would not have any adverse impact on competition in the market.
It noted that Aica Japan does not manufacture or sell any of its products in India, nor is it engaged in activity that either competes with or is vertically related to the business proposed to be acquired by way of the proposed combination.
“Surfacing/decorative laminates business in India is highly fragmented and competitive with the presence of a large number of players. The share of the Laminates Division (i.e. Sunmica Division) of BBTCL in the surfacing/decorative laminates business in India is insignificant. The business is characterised by an almost equal share of both branded and unbranded products,” the CCI said in its order.
“Given the presence of a large number of players with fragmented market shares in the surfacing/decorative laminates business in India, the proposed combination is not likely to have an appreciable adverse effect on competition in India,” it added.
On August 10, the 142-year-old Bombay Burmah Trading Corporation announced its decision to sell its sumica division to Aica Laminates India Pvt Limited, a subsidiary of Aica Kogyo Limited, as a going concern on slump sale basis for a consideration of Rs 100.30 crore.
Aica India is a recently established wholly-owned subsidiary of Aica Japan, incorporated for the purpose of the proposed transaction and does not have any business in India.
Aica Kogyo Limited is a listed Japanese company engaged in Laminates business, besides adhesives and other building products.
“The decision to sell Sunmica Division is in line with restructuring plan to focus on core business and divest low return businesses,” Bombay Burmah Trading Co had said.
This is the fourth combination cleared by the CCI after sections 5 and 6 of the Competition Act came into force in June 2011. The two sections give CCI the powers to vet high-voltage mergers and acquisitions.
Earlier, the CCI cleared the Wockhardt Danone merger, the UTV Disney merger and the Reliance Industrial Infrastructure — Bharti AXA Life takeover.
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