On June 25, 2024, the CCI approved the proposed combination relating to the acquisition of 25.01% of the total equity share capital by Mitsui & Co., Ltd. (‘Mitsui/Acquirer’) of Sneha Farms Private Limited (‘Sneha Farms/Target’) (‘Acquirer’ and ‘Target’ are collectively referred to as the ‘Parties’). ^[1]

Description of Transaction and Parties

Transaction: On May 17, 2024, a Notice was given by the Acquirer pursuant to the share subscription and purchase agreement dated March 21, 2024, entered into amongst Acquirer, Target and the promoters of Target (‘SSPA’) and shareholders’ agreement dated March 21, 2024, entered into amongst the Acquirer, Target, promoters, existing shareholders and Mr. Varun Reddy Dendi (‘SHA’).

The combination relates to the acquisition of 25.01% of the total equity share capital of Sneha Farms through a combination of primary subscription and secondary purchase on a fully diluted basis (‘Proposed Combination’).

Acquirer: Mitsui is a general trading company with a diversified business and investment portfolio, having offices and affiliates overseas. It is the ultimate holding company of its group and is also listed with the Tokyo Stock Exchange. It engages in areas including mineral and metal resources, energy, infrastructure projects, chemicals, iron & steel products, food & retail management, and IT & communication. In India, it undertakes activities including manufacturing of steel products, automotive components and vehicles, raw material procurement and chemical processing, manufacture, and sale of agriculture related products through its affiliates.

Target: Sneha Farms is a private limited company, incorporated in the year 1994. Its two subsidiaries are Sneha Gold Proteins Private Limited (‘Sneha Gold’), which is yet to commence business operations and Singh Poultry Private Limited (‘Singh Poultry’). Sneha Farms and its subsidiary, Singh Poultry, primarily operate within the poultry industry in India. Sneha Farms is also engaged in the production of fish feed, pet food, and various edible and non-edible oils and their by-products. Additionally, it operates a network of outlets for fresh poultry and fish.

Overlaps and Assessment by CCI

The CCI noted that the activities of Mitsui (through its affiliates) and Sneha Farms (including its subsidiaries and affiliates) exhibit:

Horizontal Overlaps: In the segment for manufacture and sale of fish feed in India (‘Segments’).

Vertical Overlaps: In the segment for manufacture and sale of feed additives in India by Mitsui (‘Upstream Segment’) and the segment for manufacture and sale of animal feed in India by Sneha Farms (‘Downstream Segment’).

Assessment:

The CCI found that:

i.     With regard to the Horizontal Overlaps: (a) the combined market share of Parties in the Segments in India is in the range of 0 – 5% in terms of volume and value; and (b) fish feed sector in India is characterised by the presence of several large players throughout the country like Avanti Feeds Limited, CPF (India) Private Limited, Devi Fisheries Limited, Cargill India Private Limited, Growel Feeds Private Limited etc.; and

ii.    With regard to the Vertical Overlaps: (a) Sneha Farms has less than 1% market share in the Downstream Segment, which is characterised by other large players such as Godrej Agrovet Limited, Cargill India Private Limited, Suguna Foods Private Limited, etc.; and (b) Mitsui, through its affiliate, also has market share in the range of 0 – 5% in the Upstream Segment, which is characterised by other large players such as Alltech Biotechnology Private Limited, Addiseo Animal Nutrition Private Limited, DSM Nutritional Products India Private Limited and Ayurvet Limited, etc.

Thus, the CCI concluded that the Proposed Combination is not likely to have an appreciable adverse effect on competition in India. Therefore, in the absence of any competition concern, the CCI approved the Proposed Combination.

[1] Mitsui & Co., Ltd. / Sneha Farms Private Limited (Combination Registration No. C-2024/05/1150).