CCI clears Cargill-Copersucar joint venture plan

Fair trade regulator CCI has approved the proposed joint venture between agro-processing major Cargill and Brazil-based Copersucar in respect of their sugar trading business.
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".
As per the proposed deal, Cargill International Luxembourg, an arm of Cargill Inc, and Copersucar have entered into a equal joint venture arrangement in respect of their sugar trading business wherein they would incorporate a firm in the Basque Country, Spain.
The Commission observed that both Cargill group and Copersucar group are currently engaged in the trading of sugar business at worldwide level. However, Copersucar has no business operations in India, it added.

Further, in respect of sugar business in India, Cargill's arm in the country is engaged only in sugar trading and not in sugar production, it said.
"Also, there is no other Cargill group entity, which is engaged at different levels of sugar production chain and/or trading of sugar in India," CCI said.

"Therefore, presently, there is neither any horizontal overlap nor vertical relationship between the business activities of Cargill group and Copersucar group in India," the competition watchdog added.
Under the proposed deal, the joint venture company would be active in the trading of raw, low quality white and refined sugar, and related activities worldwide, except in certain carved out jurisdictions.

The arrangement, among others, also provides for the establishment of another jointly controlled entity in Brazil, which would act as an agent of the joint venture company.
The agreement between Cargill and Copersucar was inked on March 27 following which on April 28 they had filed a notice with the CCI seeking its clearance.