Competition Commission has approved American private equity firm Bain Capital’s proposal to acquire 30 per cent stake in Indian IT firm Genpact.
Giving the green signal,the fair trade regulator said the acquisition would not have adverse impact on the domestic IT-BPO sector.
Bain Capital,co-founded by US Presidential candidate Mitt Romney,would acquire nearly 68 million shares,representing 30 per cent stake,of Genpact for about USD 1 billion. The shares would be purchased from the domestic firm’s two stakeholders — General Atlantic and Oak Hill Capital.
“… 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 hereby approves the proposed combination,” the Commission said in an order dated October 11.
Bain Capital is to execute the Genpact deal through Glory Investments A Ltd (GI A).
According to the Commission,the entities involved in the proposed deal are not engaged in identical or substitutable businesses.
“Also,the activities of GI A and Genpact are not related to each other at different stages or levels of the production chain in different markets in respect of production,supply,distribution,storage,sale or trade in goods or provisions of services in which another party to the proposed combination is engaged,” the order said.
Genpact is engaged in providing business process and technology management services,whereas Bain Capital has no presence in the IT-BPO sector in India.
The notice seeking approval was submitted to the fair trade regulator on August 30.
Prior to that,South Asia Private Investment (now known as Glory Investments) had entered into share purchase pacts with shareholders of Genpact as well as the company.
As per the agreements,Glory Investments have the right to assign the share purchases to “permitted transferee”. In this case,they are South Asia Integral Mauritius (now known as Glory Investments B Ltd) and Bain Capital India Pvt
Investors III (now known as Glory Investment IV Ltd).
The notice was jointly submitted by GI A,GI B and GI IV. Genpact began operations in 1997 as an India-based unit of General Electric,assisting the American conglomerate’s finance division.