Jul 29, 2022

CCI Approves Acquisition of Minority Stake in Delhivery by FedEx India

On November 23, 2021, CCI approved the acquisition of: (i) minority 2.9% of the equity share capital of Delhivery Limited (‘Delhivery’) by FedEx Express Transportation and Supply Chain Services (India) Private Limited (‘FedEx India’) (‘SSA Transaction’); and (ii) acquisition of operating assets in India, including physical assets, fleet, customer contracts and employees of FedEx India and TNT India Private Limited (‘TNT’) by Delhivery (‘APA Transaction’) (collectively SSA Transaction and APA Transaction will be referred to as ‘Proposed Combination’). Further, the transaction also contemplates the execution of an interconnected service agreement entered into between Delhivery and FedEx India for five years.[1]

FedEx India is ultimately held by FedEx Corporation, USA (‘FedEx’), and is present in India through the following entities: (i) FedEx India, which offers end-to-end logistics solutions; (ii) TNT, which provides logistics services inter alia in the form of express parcel deliveries and customised services; (iii) FedEx Logistics, which provides logistics services; and (iv) a branch office, which provides aviation and ramp services to its group entities. Delhivery is engaged in the business of delivery and e-commerce logistics. It also offers a range of logistics services through its affiliates and subsidiaries, including, (i) express services; (ii) freight services; and (iii) fulfilment and end-to-end/3PL (third-party logistics) services, including warehousing services.

Accordingly, the Parties identified horizontal overlaps in the broad market for overall logistics services in India (‘Broad Relevant Market’) and the following narrow/narrower markets:

i.     market for express services in India (‘Narrow Relevant Market-I’);

a.    market for domestic express services (‘Narrower Relevant Market-I’);

  •    market for domestic road express service (‘Narrowest Relevant Market-I’);
  •    market for domestic air express service (‘Narrowest Relevant Market-II’);

b.    market for international express service (air) (‘Narrower Relevant Market-II’);

ii.    market for freight services in India (‘Narrow Relevant Market-II’);

iii.   market for warehousing services in India (‘Narrow Relevant Market-III’); and

iv.   market for 3PL services in India (‘Narrow Relevant Market-IV’).

The combined market share of the parties in the Broad Relevant Market as well as in the Narrow Relevant Markets II, III, and IV is in the range of 0–5%, and the CCI noted that there are multiple other large players in these markets.

With respect to Narrow Relevant Market-I, i.e., market for express services in India, the combined market share of the parties was in the range of 15–20% (and in the range of 10-25% in the narrower/narrowest markets). However, the CCI observed that incremental market shares in the various segments and sub-segments of express services were relatively low, as Delhivery is a stronger player in domestic market segments, whereas FedEx is a stronger player in international market segments. There also exist other significant competitors such as Blue Dart/DHL, XpressBees, Safexpress, etc.

Regarding the vertical relationship, the CCI noted that combined market share in the upstream market of international express services was in the range of 20–25% and in the downstream market of domestic express service was in the range of 10–15% and that there is the presence of both national and international competitors for the parties respectively, such as DHL, whose standalone market presence is larger than the combined market presence of the parties in the international express services segment.

Therefore, the exact delineation of the relevant market was left open by the CCI since the proposed combination was unlikely to cause an AAEC and CCI approved the proposed combination under Section 31(1) of the Act.


[1] Combination Registration No. C-2021/07/855.




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