Competition watchdog CCI has approved the proposal by Maruti Suzuki India (MSI) to merge its engine and transmission supplier Suzuki Powertrain India Ltd (SPIL) into itself.
The Commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore,the Commission approves the proposed combination,” CCI said in an order.
MSI and SPIL are subsidiaries of Japan’s Suzuki Motor Corporation (SMC).
In June,MSI had announced that it will merge engine and transmission maker Suzuki Powertrain with itself. SMC holds a 70 per cent stake in SPIL,while the rest is held by MSI.
The control over the activities carried on by MSI and SPIL before and after the proposed combination remains with Suzuki Motor Corporation,therefore,the proposed combination is not likely to give rise to any adverse competition concern in India,said the CCI order.
Post the merger,SMC’s stake in MSI will go up to 56.2 per cent from 54.2 per cent due to a share swap agreement with the domestic car market leader to acquire SPIL.
Shares of Maruti Suzuki closed at Rs 1,133.05 apiece on BSE today,up 1.15 per cent from previous close.