The Competition Commission of India has approved the proposed Larsen and Toubro Komatsu deal.
The proposed combination involves acquisition by L&T of all shares held by KAP in L&T Komatsu (LTK), a 50:50 joint venture company of L&T and Japanese firm Komatsu Asia Pacific.
L&T Komatsu is a joint venture for manufacturing hydraulic equipment.
According to the order, after the acquisition L&T will fully own L&T Komatsu. Post-acquisition, L&T Komatsu will cease to be a joint venture and will come under the control of L&T.
“The proposed combination will, therefore, result in transfer from joint control to sole control in L&T Komatsu,” the competition panel said.
The order said that according to information provided in the notice, pursuant to the acquisition by L&T of the entire shareholding of KAP in L&T Komatsu, the technology licensed to L&T Komatsu by Komatsu would be returned to the latter.
“However as stated in the notice, in order to meet the Indian market requirements and till Komatsu establishes own facilities in India, L&T and Komatsu could also enter into certain transition arrangement under which L&T Komatsu or its successors company would provide contract manufacturing service to Komatsu India Pvt Ltd, which is a 100 per cent subsidiary of Komatsu in India, for a period ranging from three to four years,” the panel said.
The order said that Komatsu India Pvt Ltd shall be appointing L&T to market and sell the products of KIPL and Komatsu.
bindu.menon@thehindu.co.in