New Delhi: Fair trade watchdog Competition Commission of India (CCI) has asked industrial gases firms Munich-based Linde AG and Connecticut headquartered Praxair Inc. to sell off some of their assets in India before consummating an $80 billion global merger to avoid the deal stifling competition here.
The regulator cleared the merger subject to the asset sale to address the anti-competitive effects resulting from the combination, said a statement from CCI.
It said that an investigation into the deal showed it is likely to have an appreciable adverse effect on competition in some markets in India, which could be addressed by way of modifications to the transaction.
The regulator therefore ordered the sale of Linde India’s entire shareholding in Bellary Oxygen Company Private Ltd., a joint venture between Linde India and Inox Air Products Ltd. Praxair has to sell three on-site plants at Jamshedpur and two cylinder filing stations located at Asansol and Kolkata. Linde’s on-site plant JSW – 2 located at Bellary, Karnataka and two cylinder filing stations at Hyderabad and Chennai too are to be sold to independent entities, said CCI.
“The remedies ordered by the Commission aim to eliminate the substantial overlap in terms of presence of the Parties in the affected regions and for establishment of independent competitor(s) or strengthening of the existing competitor(s) by ensuring that they have an integrated presence in markets for industrial gases encompassing tonnage, bulk and cylinder businesses," said the CCI statement.
The mega merger of the industrial gases companies has attracted similar modifications from the US Federal Trade Commission too. “Based on additional feedback from antitrust authorities, it is now expected that the revenue threshold for divestiture commitments will be exceeded…Linde and Praxair remain in constructive dialogue with each other and the regulators on how to satisfy their requirements," said a statement posted on the website of Linde Group.