On January 23, 2019, CCI approved the acquisition of 12.54% and 1.25% shareholding in Zydus by True North Fund V LLP and True North Fund VI LLP (‘True North Funds’) and Pioneer Investment Fund (‘Pioneer’). Separately, Cadila and Zydus Family Trust (‘ZFT’), existing shareholders in Zydus, proposed to acquire additional equity shares in Zydus. [1]

The parties specifically submitted that the said transaction was undertaken to finance the acquisition by Zydus of Heinz India and both the acquisitions were submitted to be interconnected transactions under Regulation 9(4) of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011.

As per the transaction, True North Funds would acquire the right to appoint a director/ observer to the board of director. Additionally, following the acquisition of Heinz India, True North Funds would also have a right appoint a director/ observer in Heinz India. CCI observed that True North Funds (directly or indirectly) were neither engaged in the same business nor in any business that may considered to be vertically linked with that of Zydus/ Heinz India. With respect to ZFT and Cadila, it was noted that both were already majority shareholders in Zydus and also, that the acquisition of additional equity shares in Zydus was unlikely to cause any concern.

 In light of the above, CCI concluded that this combination was unlikely to cause AAEC in India.