CCI approves Nirma merger deal with seven cos

Fair trade regulator CCI has given its green signal to the proposed deal that includes merger of seven companies into FMCG major Nirma, saying that the deal does not raise anti-competition concerns in the country.
Under the proposed deal, seven companies -- Banihal Holdings, Kargil Holdings, Kulgam Holdings, Leh Holdings, Uri Holdings, Kanak Castor Products and Siddhi Vinayak Cement -- would amalgamate into Nirma.
Further, the deal involves demerger of the healthcare division of Nirma into Aculife Healthcare.
Aculife has been incorporated for purpose of taking over the healthcare division of Nirma. At present, the entity is not carrying out any business activity.

In an order released today, the Competition Commission of India (CCI) said that "the proposed combination is not likely to have appreciable adverse effect on competition in India".
The regulator observed that ultimate control over the business activities of Nirma, Banihal Holdings, Kargil Holdings, Kulgam Holdings, Leh Holdings, Uri Holdings and Kanak Castor Products "both before and after the combination remains with the promoter, Karsanbhai K Patel, through the shareholding in various capacities and through the immediate family members".

It also noted that NBFC firms -- Banihal Holdings, Kargil Holdings, Kulgam Holdings, Leh Holdings and Uri Holdings -- are engaged primarily in the business of providing loans and making investments within the Nirma group companies, except for investment of a minimal nature by Kulgam in two companies.

As regards Siddhi Vinayak Cement, CCI noted that as a subsidiary of Nirma the control over the business activities of the firm "would remain with Nirma".
On the de-merger of the health care division of Nirma into Aculife Healthcare, the Commission said there is no overlap between the business activities of the two companies "as Aculife Healthcare has been recently incorporated and is presently not carrying out any business activities".
The parties to the combination had approached CCI for its approval in November 2014.