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India – CCI Approves Globalfoundaries Acquisition Of Microelectronic Business Of IBM.

16 February, 2015

 


On December 23, 2014, CCI approved the proposed acquisition by Globalfoundaries U.S. Inc. (‘GF’) of certain assets and liabilities of International Business Machines Corporation’s (‘IBM’) microelectronic business (‘Target Business’) pursuant to the execution of a Master Transaction Agreement (‘MTA’).

GF, a firm headquartered in United States, offers a full range of wafer fabrication services and technologies to a number of third party IC suppliers and original equipment manufacturers (‘OEMs’). However, GF has no direct or indirect operations in India. IBM, incorporated in United States, has five major business operations: (i) global technology services; (ii) global business services; (iii) software; (iv) systems and technology; and (v) global financing. IBM operates in all the above stated business segments in India through its wholly owned subsidiary, IBM India Private Limited.

CCI noted that there was limited overlap in the business of GF and IBM in relation to Target Business which consisted of (i) captive design and manufacture of integrated circuits (‘ICs’); (ii) design and manufacture of application specific integrated circuits (‘ASICs’) for sale to third parties and (iii) provision of wafer fabrication services to third parties for manufacture of ASICs and application specific standard products (‘ASSPs’). CCI, analyzing state of competition at global level for foundry manufacturing services for ICs, observed that post combination, GFwould be constrained by presence of other companies. As regards vertical relationship, CCI was of opinion that although there would be vertical relationship between the Parties in market for ASICs, it was not likely to Adverse Effect in India. Therefore, CCI approved the proposed combination.

AZB 

 

For further information, please contact:

 

Zia Mody, AZB & Partners
[email protected]

 

Abhijit Joshi, AZB & Partners 
[email protected]

Shuva Mandal, AZB & Partners 
[email protected]

 

Samir Gandhi, AZB & Partners
[email protected]

Percy Billimoria, AZB & Partners 
[email protected]

 

Aditya Bhat, AZB & Partners 
[email protected]

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