Wipro GE's deal with 3 employees gets CCI nod

Wipro GE Healthcare's proposed deal with its three employees related to medical equipment distribution services in the country has received the green signal from the Competition Commission of India (CCI).
According to CCI, the multi-layered deal between the medical equipment major and its employees -- S Ganesh prasad, Kiran Thadimarri and R R Balaji -- "is not likely to have appreciable adverse effect on competition in India".
The three individuals are engaged in Wipro GE's distribution services business.
The deal involves incorporation of a new company by two of these individuals in the healthcare sector and subscription of shares of the new firm in agreed percentages by the parties.

Besides, the deal entails a dealership agreement related to the distribution of certain products such as diagnostic imaging products, non-imaging products in certain territories spread across India as well as transfer of certain assets of Wipro GE including its unexecuted work orders to the new firm.
Through a recently released order, CCI noted that as the new company "is yet to be incorporated and does not have any business operations at present, there is no horizontal overlap or any vertical relationship between the business activities of Wipro GE and new company".

Further, the regulator observed that "the existing dealers of Wipro GE will have an option to continue to deal in the products which would be distributed by the new company pursuant to the proposed combination except that post-combination they would require to interface with the new company instead of Wipro GE".

The Commission also said that Wipro GE would have a right to sell directly the products which would be distributed by the new firm pursuant to the proposed combination or appoint new dealers for the same.
"It is, therefore, stated that the proposed combination is likely to result only in restructuring of the existing distribution business of Wipro GE and is not likely to cause a significant change in the market for distribution services of medical equipment and devices in India," it noted.
Wipro GE, a joint venture between General Electric Company and Wipro Enterprises Ltd, had entered into the deal with the three individuals in November 2014.