Fair trade watchdog CCI has cleared Vijay Mallya-led United Spirits proposed sale of a distillery in Tamil Nadu to Enrica Enterprises,as the deal does not raise adverse competition concerns.
The deal involves hiving off entire operations at the unit of United Spirits Ltd (USL) that manufactures Indian Made Foreign Spirits (IMFS) to Enrica by way of slump sale on a going concern basis. The unit is located at Poonamallee,Chennai.
Post-deal,Enrica would make certain IMFS brands of United Spirits using technology and know-how and under the trademark of the Vijay Mallya firm.
In an order dated December 26,the Competition Commission of India (CCI) said 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 under…the Act.
According to the CCI,the manufacture and sale of IMFS in Tamil Nadu is highly regulated by the Tamil Nadu State Marketing Corporation,which has the exclusive privilege of conducting trade in IMFS in Tamil Nadu.
There is also the presence of a number of manufacturers of IMFS in Tamil Nadu and as already noted,EEPL (Enrica Enterprises) and its promoters are currently not engaged in the business of IMFS in the state of Tamil Nadu, the Commission added.