CCI approves FMC’s proposed deal to buy Auriga subsidiary
New Delhi: Fair trade regulator Competition Commission of India (CCI) has approved US-based FMC Corp.’s proposed acquisition of Denmark’s agrochemical firm Auriga Industries’ arm, saying the deal will not cause anti-competitive concerns in the market.
Under the proposed deal, FMC would purchase, either directly or through a wholly-owned subsidiary, the entire issued and outstanding share capital of Cheminova—a subsidiary of Auriga. Following the execution of the deal Cheminova will become a subsidiary of FMC Corp.
FMC, a company listed on the New York Stock Exchange and the Chicago Stock Exchange, is operating in various business segments including agricultural solutions wherein it develops, markets and sells agrochemicals like insecticides, herbicides, fungicides and plant growth regulators (PGRs).
It operates in India through its arm FMC India Pvt. Ltd. Meanwhile, Cheminova is also engaged in the business of development, production and marketing of various agrochemicals products including insecticides, herbicides and fungicides and is present in India through its subsidiary Cheminova India.
In an order on Monday, CCI said that the proposed deal “is not likely to have an appreciable adverse effect on competition in India”.
The regulator noted that the competition assessment of the proposed deal relates to the agrochemical products which are used to enhance crop yield and quality by protecting them against certain forms of damages.
CCI observed that “there is no significant vertical relationship between the parties except a supply arrangement pursuant to which Cheminova India purchases one of the FMC India’s products and sells it under its brand name”.
Further, it noted that “as there are other domestic and global players who are engaged in all the segments of agrochemical products, having substitutable products competing with the products of the Parties, the vertical relationship between the parties, as stated above, is not likely to raise any competition concern”.
CCI approval on the deal was sought after the concerned companies had entered into a share purchase agreement executed between FMC and Auriga Industries on 8 September, last year.