The Competition Commission of India (CCI) approved the acquisition of 100% of issued and outstanding share capital and sole control of VGP Holdings LLC, a subsidiary of Valvoline Inc, by Saudi Arabian Oil Company (Saudi Aramco) through Gateway Velocity Holding Corp(Gateway) and Aramco Overseas Company B.V. (AOC) from Valvoline Inc.
Note: Gateway is a wholly-owned subsidiary of AOC, which is a wholly-owned subsidiary of Saudi Aramco.
Acquirer: Gateway Velocity Holding Corp. (Gateway)
Target: VGP Holdings LLC
Seller: Valvoline Inc.
i. CCI approved the acquisition under Regulation 13(A) of the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011 (as amended).
ii. As a result of the Proposed Transaction, Saudi Aramco will acquire:
- 100% of the issued and outstanding share capital in Target,
- Sole control over Target.
iii. Therefore, the Global Products Business, which sells Valvoline and other branded and private-label engine and automobile preventive maintenance products in several countries, will be acquired by Saudi Aramco.
About VGP Holdings LLC:
i. VGP Holdings LLC is a limited liability company incorporated under the laws of Delaware.
ii. Valvoline Inc. (Seller) will transfer one of its 2 business segments (the global products business, Global Products Business) to Target following a pre-closing reorganisation.
iii. VGP Holdings LLC sells lubricants, coolants and AdBlue (diesel exhaust fluid) in India.
About Gateway Velocity Holding Corp. (Gateway):
i. Gateway is a newly formed corporation in Delaware, the United States (US). It is a holding company and has no business activities in India or elsewhere.
ii. The primary activities of Saudi Aramco are prospecting, exploring, drilling, and extracting hydrocarbon substances, as well as processing, manufacturing, refining, and marketing these substances.
iii. Its primary business in India is marketing and selling hydrocarbons and their derivatives (including polyethylene, polypropylene, resins, lubricants and base oils).
CCI gives nod to Deal Involving VVDN Technologies
The CCI has approved the acquisition of shareholding by Kotak Funds, Kotak Special Situations Fund (KSSF) and Kotak Pre-IPO Opportunities Fund (KPIOF), and India Business Excellence Fund (IBEF)-IV through a combination of secondary share purchases of equity shares and subscription to Compulsorily Convertible Debentures (CCD) of VVDN Technologies.
Acquirers: KSSF, KPIOF and IBEF-IV
Target: VVDN Technologies Private Limited
i. Kotak Funds proposes to acquire a shareholding in VVDN Technologies as it is an emerging player in the Electronic Manufacturing Services (EMS)/Original Design Manufacturing (ODM) space with international operations.
- According to Kotak Funds, VVDN Technologies is well-positioned to benefit from the high growth potential of both Indian and international markets.
ii. IBEF-IV proposes to undertake the Proposed Combination since VVDN Technologies has exhibited significant growth throughout the financial year (FY) 2020–2022 while ensuring strong operating margins and superior return ratios.
- Thus, IBEF-IV expects to generate strong returns through its investment in Target.
iii. VVDN Technologies proposed to use the proceeds from the issuance of the CCDs to support its expansion into the EMS/ODM market.
Recent Related News:
On 19th January 2023, the Competition Commission of India (CCI) approved the internal recognition of the Kalyani Group’s companies. The deal has been cleared under the green channel route, an automated approval scheme.
About the Competition Commission of India:
Acting Chairperson- Sangeeta Verma
Headquarters- New Delhi, Delhi