TCS-Mitsubishi's Japanese JV deal gets CCI nod

Fair trade watchdog CCI has cleared the proposed joint venture between Tata Consultancy Services and Mitsubishi Corp, saying the deal would not have adverse impact on competition in India.
The JV, to be set up in Japan, will be between Tata Consultancy Services Asia Pacific Pte Ltd (TCS APAC) and the Japanese conglomerate Mitsubishi Corp, with the former having 51 per cent in the entity.
In April, TCS signed an agreement to merge two units in Japan with an arm of Mitsubishi Corporation to form an IT company with expected sales of USD 600 million.
Giving green signal, the Competition Commission of India said the deal is not likely to have appreciable adverse effect on competition in the country.

"The proposed combination relates to IT Services and ITeS. It is observed that TCS Japan, Nippon TCS, ITF and Mitsubishi Corp do not provide any IT Services & ITeS in India. TCS APAC also does not provide any services in India.
"The proposed combination is, therefore, not likely to raise any competition concern in India," said a CCI order, dated June 26 but made public today.

Singapore-based TCS APAC is a wholly-owned subsidiary of TCS while TCS Japan is a subsidiary of the former.
Nippon TCS Solution Center Ltd (Nippon TCS) is a joint venture where TCS has 60 per cent stake while the rest is held by Mitsubishi Corp. Another entity in the deal, Japan-based IT Frontier Corp (ITF) is a subsidiary of Mitsubishi Corp.

In India, Mitsubishi Corp has interests in diverse segments including chemicals and energy, but does not have presence in the IT Services & ITeS sector.
Under the deal, TCS Japan would acquire the 40 per cent stake held by Mitsubishi Corp in Nippon TCS, making the entity its 100 per cent subsidiary. In the second stage, Nippon TCS would be merged into TCS Japan.
Subsequently, TCS Japan would be merged into ITF. After that TCS APAC stake would go up to 51 per cent in ITF while the remaining would be with Mitsubishi Corp.