New Delhi: Fair trade regulator CCI has approved Japan's auto component maker Denso Corporation's proposed joint venture with Pricol Ltd, saying the deal would not have an adverse impact on competition.
The proposed deal involves transfer by auto component maker Pricol, of its 'Denso Technology Instrument Cluster Undertaking', relating to the four-wheeler personal passenger vehicles in Coimbatore and Gurgaon, to its subsidiary Pricol Components Ltd (PCL).
As per the agreement, upon the transfer, Denso would acquire 51 percent stake in PCL.
In its order dated March 19, Competition Commission of India (CCI) said that "the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, the Commission hereby approves the proposed combination under...(Competition) Act".
The regulator noted that the proposed deal would not have an adverse impact on competition as among others things, Denso and Pricol would be jointly controlling the affairs and management of PCL.
It observed that "there is no horizontal overlap between the products of Denso and Pricol" as neither the Japanese firm nor its affiliates in India are engaged in the business of manufacturing/supply of instrument clusters for four wheeler personal passenger vehicles, two wheeler vehicles and commercial vehicles.
"...Denso supplies certain components for instrument clusters to Pricol, as per their specification; however, these components are not supplied by Denso to any other manufacturer in India and the value of such supplies during the previous financial year was insignificant," it added.
Following the joint venture agreement on February 14, 2013, Denso had approached CCI for its approval.