Jurisdiction - India
India – CCI Approves Zuari’s Open Offer For Mangalore Chemicals And Fertilisers.

13 October, 2014


On September 4, 2014, CCI approved the acquisition of up to 26 percent of the equity share capital of Mangalore Chemicals and Fertilisers Limited (‘MCFL’) by Zuari Fertilizers and Chemicals Limited (‘ZFCL’) and Zuari Agro Chemicals Limited (‘ZACL’) by way of a competing open offer as per the Securities and Exchange Board of India (Substantial Acquisition of Shares & Takeovers) Regulations, 2011 (‘Takeover Code’). ZFCL and ZACL filed the notice under Section 6(2) of the Competition Act pursuant to a Shareholders’ Agreement (‘SHA’) between ZFCL, ZACL and United Breweries group comprising of United Breweries (Holdings) Limited, Kingfisher Finvest India Limited and McDowell Holdings Limited. 


ZFCL is a wholly owned subsidiary of ZACL. ZFCL does not currently manufacture or trade in any fertilizer or non-fertilizer products. ZACL is a public limited listed company dealing in fertilizers, pesticides and chemical and organic products through its subsidiaries and joint ventures. In light of the common promoter shareholding and presence of common directors in ZACL, Zuari Global Limited (a holding company of ZACL) and Chambal Fertilisers and Chemicals Ltd. (‘Chambal’), CCI also ascribed the market shares of Chambal to those of the parties. MCFL is in the business of production and trading of fertilisers, plant protection chemicals and industrial chemicals. CCI observed that there were overlaps between the parties in fertilisers, pesticides, chemicals and organic products. However, CCI found the overlaps in pesticides, chemicals and organic products to be minimal.

While examining overlaps in case of fertilisers, CCI recognized the substantial regulatory framework governing the manufacture, import, sale, pricing, and quality control of fertilisers in India which seeks to ensure adequate supply of fertilisers to users at affordable prices. Further, the parties are mostly into trading fertilisers, manufacturing only a few types themselves and in instances of overlaps where parties merely trade rather than manufacture, the fact that most of these products can be freely imported under the Open General License India by any person after obtaining requisite approvals suggests that these overlaps do not raise any competition concerns. In other instances of overlaps in case of fertilisers, either the combined market shares are not substantial or the post-combination increments in market shares are minimal. CCI also noted the presence of significant competitors in the market.

In light of the aforementioned factors, CCI considered it unlikely that the proposed combination would cause appreciable adverse impact on competition in India and gave its approval to the proposed combination



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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