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India – CCI Approves The Amalgamation Of UGSL and SUSPL.

7 February, 2014

 

 

On 31 December, 2013, CCI approved the proposed amalgamation of Uttam Galva Steels Limited (‘UGSL’) and Shree Uttam Steel and Power Limited (‘SUSPL’).


CCI observed that there is no horizontal overlap between the products of UGSL and SUSPL. As regards the vertical relationship between the parties, SUSPL has not started manufacturing or undertaken any trading activities in the year 2012 -13. However, once the manufacturing facilities of SUSPL are established, it would be a backward integration for UGSL. On the state of competition in the market, CCI observed that there are various integrated steel companies as well as intermediate steel producers who are engaged in the business of products and are similar to those being produced by UGSL. Most notably, the market share of UGSL, in the cold rolled steel and galvanised steel products, is insignificant to raise any competition concern.


Considering these facts, CCI concluded that the proposed transaction is not likely to result in any Adverse Effect and approved the proposed transaction.


In this case, CCI also initiated separate proceedings under Regulation 48 of the Competition Commission of India (General) Regulations, 2009 regarding imposition of penalty under Section 43A of the Act, as the parties failed to notify CCI within the 30 day time-limit prescribed under the Act. CCI observed that, the delay in giving the notice under sub-section (2) of Section 6 of the Act was for a period of less than one week and inadvertent. CCI also noted that the parties were in discussions with the officials of CCI for seeking clarification on the procedural requirements for giving the notice regarding the proposed amalgamation. Considering the facts and circumstances of the case, CCI was of the opinion that no penalty is required to be imposed on UGSL and SUSPL in terms of Section 43A of the Act.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com


Shuva Mandal, AZB & Partners 
shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com


Percy Billimoria, AZB & Partners 
percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

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