Mitsui's 26 per cent stake buy in Arch Pharmalabs received CCI approval
CCI approves Mitsui's deal with Arch Pharmalabs.
New Delhi, September 21, 2012: The Competition Commission of India (CCI) has approved the proposed 26.71 per cent stake buy from Mitsui in the domestic biopharmaceutical company, Arch Pharmalabs. It is worth noting here that that it is the first pharma sector deal cleared by the fair trade regulator.
The proposed acquisition of further 26.71 per cent stake by Mitsui in Arch "is not likely to create any adverse competition concern,” CCI said in an order date September 19. Once the deal is complete, the total stake of Mitsui in the domestic company will reach 31.96 per cent from the existing 5.25 per cent.
CCI observed that since Mitsui does not have any direct or indirect control in any other enterprise in India which is engaged in similar business areas as compared to Arch Pharmalabs. Mitsui through some of its Indian subsidiaries sells two products to arch that are used as raw material in contract manufacturing, and other being used as a utility material in running a production line.
In addition, Mitsui, through one of its subsidiaries buys some material from Arch and trades it to the parent company in Japan. However, CCI said that this vertical integration is not much of relevance from its perspective.