CCI clears proposal for buyout of Dell

Clearance from the CCI comes at a time when the proposed $24.4 billion buyout of Dell by its founder is facing rival takeover bids for the company from its largest shareholder Carl Icahn and private equity major Blackstone

Fair trade regulator CCI has approved a proposed buyout of US-based global computing giant Dell Inc by its founder and chief Michael Dell, saying the deal will not impact competitive landscape in Indian market.

The clearance from the Competition Commission of India (CCI), however, comes at a time when the proposed $24.4 billion buyout of Dell by its founder is facing rival takeover bids for the company from its largest shareholder Carl Icahn and private equity major Blackstone.

The company said last month that it has got competing offers from billionaire investor Carl Icahn and Blackstone, which could be superior to a proposed joint buyout offer from Michael Dell and private equity firm Silver Lake Group.

The proposal involves Michael Dell and Silver Lake acquiring full control of the company through certain entities and finally converting it into a privately held firm.

Any major merger and acquisition deal involving businesses in India requires a clearance from CCI, which is mandated to ensure fair competition in the market.

In an order dated April 16 and released today, CCI said that it was approached last month by Michael Dell and Silver Lake for clearance to the proposed deal.

Subsequently, CCI asked the applicants to provide more information and amend certain defects in their application.

After going through the contours of the proposed deal, CCI said that the transaction only involved a change in the ownership and control of Dell, which was present in markets for IT hardware and peripheral equipment, as well as IT services and solutions.

"The proposed combination is not likely to have an appreciable adverse effect on competition in India," CCI said in its order, while approving the proposed transaction.

"Michael S Dell, as an individual, has no business in India and notwithstanding that certain business activities of some portfolio companies controlled by Silver Lake in India, could have horizontal overlap as well as a vertical relation with the business activities of Dell in India," CCI said.

However, the revenue generated by these portfolio firms controlled by Silver Lake, from the said business activities in India, is insignificant, CCI added.