Samara-Amazon acquisition of More gets CCI approval after due diligence

Amazon and Samara Capital’s acquisition of Aditya Birla Retail Limited run More Supermarkets had been facing CCI’s probe earlier due to a potential violation of the new FDI norms.
In the latest series of events, the Competition Commission of India (CCI) has given the contract an “approved” seal. After studying the contract only from the perspective of competition in the market, the controlling authority has given the permission for the deal to go through.
As far as the ownership and management structure of the acquired firm is concerned, it comes under the jurisdiction of Department of Industrial Policy and Promotion (DIPP), that issued the new norms for marketplaces in the FDI Policy. CCI is not concerned with the same.
Following the guidelines of DIPP will be the company’s headache now, and ensuring that the same takes place will be in DIPP’s command.
The company will, however, have to modify the deal according to the new norms if it wants to avoid legal hindrances.
Amazon, which was till now waiting to acquire its 49 per cent share, may have to wait long for its plans of using More stores as sellers on its hyperlocal food and grocery platform, Amazon Prime Now. This is due to the new provisions in the FDI marketplace policy which disallows any investee or acquiree company to sell over the marketplace’s platform.
Witzig Advisory Services, the arm of Samara Capital directly involved in the acquisition proceedings received the approval letter from CCI, which it had filed for in October. Further instructions and conditions from the concerned authorities are awaited by the company.
The latest development was reported by ET.
Source: Entrackr