Further colour has emerged on India’s approval of the Praxair-Linde merger, with a statement from the country’s Competition Commission (CCI) detailing the remedies required for clearance.
News surfaced of the CCI’s conditional approval last week, after the organisation had tweeted, “CCI_India approves combination of Linde and Praxair, subject to compliance of certain modifications.”
The competition regulator has now issued an official statement, which confirms that, “Based on its investigation, the Commission was of the opinion that the proposed combination is likely to have an appreciable adverse effect on competition in some markets in India but the same could be addressed by way of modifications to the proposed combination.”
Accordingly, the Commission approved the proposed combination under Section 31(7) of the Competition Act, 2002, subject to the following divestments being implemented:
“The aforesaid remedies shall be implemented by way of sale and transfer of respective businesses to an independent entity(ies), which meets the parameters prescribed in the order of the Commission,” it added.
The remedies ordered by the Commission aim to eliminate the substantial overlap by the two companies in the affected regions, as well as either the establishment of new players in the region or the strengthening of other existing competitor(s).
Speaking on this overlap last week, gasworld’s Senior Business Analyst, Jonny Dearden, had explained, “Linde and Praxair are currently the two dominant players in the Indian market, holding a combined market share of above 40%.”
“Both companies hold supply scheme contracts with large Indian steel companies. Linde has been supplying Tata Steel in Kalinganagar since 2016 and Praxair has supplied JSW steel in Maharashtra with gaseous nitrogen since 2015. With steel production contributing almost 2% to the country’s GDP both companies will feel confident of future demand growth.”
“Post-merger they look set to continue to solidify their position as the driving force in India’s industrial gases market.”
Praxair and Linde continue to aim for completion of their merger in the second half of 2018. The companies are working toward a deadline of 24th October (2018), as dictated by German financial market rules.
At the time of writing, the transaction has been given clearance in 18 countries/regions, with final approval in six countries/regions (US, South Korea, China, Brazil, Chile and Argentina) still pending. There is no closing condition attached to Chile and Argentina.