MAHINDRA-CIE CONGLOMERATION DEAL, 2013

FACTS

• On 12th July, 2013 the Competition Commission of India (CCI) received a Notice relating to a proposed Combination under section 6(2) of the Competition Act, 2002 by CIE Group Companies and the Mahindra Group Companies.

• Mahindra & Mahindra (M&M) and CIE Group had entered into various Agreements on June 15, 2013 following which they had approached CCI for its Approval.

• As per the deal, CIE would consolidate its European Forgings Businesses with Mahindra Systech firms that comprises of Mahindra Forgings, Mahindra Composites, Mahindra Castings, Mahindra Investments, Mahindra Gears International and MUSCO, into one entity - Mahindra CIE Automotive Limited constituting a series of steps such as Acquisition of Stake in  Mahindra Forgings, Mahindra Composites and Mahindra  Castings by a CIE's Paticipaciones Internacionales Autometal (PIA).

• CIE Group had no presence in the Auto-Component Business in India as well as no Investments in Indian Firms involved in Auto-Component Businesses.

• After the Implementation of deal -

1. M&M would continue to be present as a Shareholder of Mahindra CIE with a Holding of 20.04 percent.
2. The Technologies currently being used by the Mahindra Systech firms would continue to be utilized.

APPROVAL BY CCI

CCI observed that the deal did not contemplate combination of two existing players in the Indian Auto Component manufacturing Business and will not have adverse effect on Competition. Hence, it has given its Approval to Conlomerate Mahindra & Mahindra Group's (M&M) proposed deal with Spain's Auto-Component Maker CIE Group.