Global retail giant Walmart has got fair trade regulator CCI's green signal for purchase of Bharti group's almost 50 per cent stake in their Indian joint venture for wholesale stores business.
The JV, Bharti Wal-Mart Private Ltd, was set up to operate wholesale stores under the Best Price Modern Wholesale brand and it presently owns 19 such wholesale cash and carry stores across India. It was not catering directly to retail consumers in the country.
In an order released today, the Competition Commission of India (CCI) said the proposed buyout of Bharti group's stake in the JV by Walmart "is not likely to have appreciable adverse effect on competition in India and therefore, the Commission hereby approves the proposed" deal.
After deciding to part ways in October, Bharti group and Walmart approached the CCI last month seeking approval for the deal wherein the US-based global retail giant would acquire the stake held by the Sunil Mittal-led business conglomerate in the venture.
Earlier this month, the CCI had asked Walmart and Bharti Ventures Limited (BVL) to "remove certain defects and provide" certain additional details for the approval.
The split between the two groups involves two inter-connected and inter-dependent transactions with respect to their businesses. The first is the acquisition of 50 per
cent minus 515 equity shares of Bharti Wal-Mart Private from BVL and Cedar Support Services Ltd.
The remaining shares are already held by Walmart and the purchase of additional shares would take its total holding in Bharti Wal-Mart Private to 100 per cent.
The second transaction involves the acquisition of 45.58 crore compulsorily convertible debentures (CCDs) of Cedar by BVL from Wal-Mart Mauritius Holdings.
BVL presently holds 100 per cent of Cedar's equity and after the transaction, the Bharti group would own a 100 per cent stake in Cedar without any CCD holding by Walmart. After looking into various aspects of the deal, the CCI said, "Presently, the parties to the proposed combination are not competing with each other in the markets for wholesale, retail or real estate services."
"...It is observed that the proposed combination would not result in the elimination of any competition from the markets