On January 28, 2021 The Competition Commission of India (CCI) under Section 31(1) of the Competition Act, 2002, gave approval for the acquisition of Indo Gulf Fertilisers(IGF), a fertiliser division of Grasim Industries Limited (GIL) by Indorama India Private Limited (IIPL).
- IIPL will acquire Indo Gulf Fertilisers as a going concern on a slump sale basis.
Target Business– Indo Gulf Fertilisers
Points to be Noted
i.In November 2020 GIL decided to sell its entire stake in IGF to Indorama Corporation Pte Ltd in a slump sale for Rs 2,649 crore.
ii.Indorama India Pvt Ltd, a subsidiary of Indorama Corporation Pte Ltd will take control of the India business.
What is Slump Sale?
i.As per section 2(42C) of Income -tax Act 1961, ‘slump sale’ means the transfer of whole or part of business concern to another entity as a going concern basis for a lump sum amount as consideration without values being assigned to the individual assets and liabilities in such sales.
ii.A going concern basis means that an entity will remain in business in the near future.
Info about the Companies
Indorama India Private Limited (IIPL):
It is formerly called IRC Agrochemicals Pvt. Ltd
HeadQuarters– Kolkata, West Bengal
CEO & MD– Ashvini Hiran
Grasim Industries Limited(GIL):
It is a flagship company of the Aditya Birla Group.
MD– Mr. Dilip Gaur
HeadOffice– Nagda, Madhya Pradesh
Indo Gulf Fertilisers(IGF)
It is an agri-solutions provider and is marketed under the name ‘Birla Shaktiman’.
About Competition Act, 2002
i.The Competition Act, 2002 was amended by the Competition (Amendment) Act, 2007.
ii.The act forbids the anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A- Merger and Acquisition), that may or may not have a significant adverse effect on competition within India
Recent Related News:
On December 28, 2020 ICICI Bank entered into an agreement with Myclassboard Educational Solutions Pvt Ltd(MESPL) to acquire 9.09% stake in MESPL through acquisition of 100 equity shares and 104,890 Cumulative Compulsorily Convertible Preference Shares on fully diluted basis.
- The acquisition happens for a cash consideration of Rs 4.5 crore.
About Competition Commission of India (CCI):
Established by– The Central Government with effect from 14th October 2003
Headquarters– New Delhi, India
Chairman– Ashok Kumar Gupta