May 14, 2019

CCI approves acquisition of shares by CA Swift Investments and Deli CMF Pte. Limited in Delhivery Private Limited

On February 21, 2019 and March 22, 2019, CCI approved the acquisition of Carlyle Series F Preference Shares  by CA Swift Investments[1] (‘CA’) and preference shares by Deli CMF Pte. Limited[2] (‘Deli’), respectively, in Delhivery Private Limited (‘Delhivery’) (‘Parties’). These acquisitions were made pursuant to a Share Subscription Agreement (‘SSA’) dated December 20, 2018. CA and Deli, the existing shareholders of Delhivery, held 12.75% and 4.76% (on a fully diluted basis) equity shareholding. respectively, in Delhivery and pursuant to the completion under the SSA, CA’s and Deli’s shareholding in Delhivery would be 11.88 % (‘Proposed Combination-1’) and 4.51% (on a fully diluted basis) (‘Proposed Combination-2’) respectively. The reduction in CA and Deli’s equity shareholding in Delhivery post the Proposed Combination 1 and Proposed Combination 2 is due to the subscription of 22.44% of the total share capital of Delhivery by SVF Doorbell (Cayman) Limited (‘SVFD’), which is also part of the common agreement i.e., the SSA. SVFD’s subscription to 22.44% of the total share capital of Delhivery was earlier notified to CCI and was approved vide order dated 21 February 2019[3]. CA, Deli, SVFD, Delhivery and certain others also entered into a Shareholders’ Agreement (‘SHA’) on December 20, 2018.

The Proposed Combination -1 was notified in relation to subscription by CA of Carlyle Series F Preference Shares in Delhivery. CA is an investment holding company incorporated in Mauritius. It is a special purpose vehicle owned and controlled by investment funds and advised by affiliates of the Carlyle Group (a global alternative asset manager).

Deli is a wholly owned subsidiary of China Momentum Fund, L.P. (‘CMF’), a private equity fund, and has been incorporated solely for the purpose of making investments in Delhivery.  Fosun China Momentum Fund G.P. Limited (‘FCM’), a wholly owned subsidiary of Fosun International Limited (‘FIL’), is the general partner of CMF. Deli alone did not qualify the financial threshold under Section 5 of the Act. However, taking into account the financials of FIL, which controls the management and operation of CMF, the notice was filed by Deli with CCI with respect to the Proposed Combination 2.

Delhivery, which is incorporated in India, is engaged in provision of third party logistics services in India, including the provision of services such as transportation, warehousing, etc.

Based on the information provided, CCI approved the Proposed Combination-1 without delineating a relevant market since: (i) there was no horizontal or vertical overlap between the activities of the Parties; and (ii) on account of the acquisitions by SVF Doorbell (Cayman) Limited and Deli, despite the additional investment by CA, its shareholding in Delhivery, in percentage terms, would reduce after the Proposed Combination.

While assessing Proposed Combination-2, CCI noted a limited vertical overlap between the activities of the Parties, since one of the companies beneficially owned by FIL appeared to have investments in an entity which is engaged in the leasing of trucks in Karnataka, Tamil Nadu and Mumbai.

However, CCI also approved the Proposed Combination-2, considering: (i) Deli and Delhivery are not engaged in similar services; (ii) facts and factors provided for competitive assessment under Section 20(4) of the Act; and (iii) Deli’s shareholding in Delhivery, in percentage terms, would reduce after the Proposed Combination-2, because of the acquisitions by SVF Doorbell (Cayman) Limited and CA.

[1] Combination Registration No. C-2019/01/634 [2] Combination Registration No. C-2019/02/640 [3] Combination Registration No. C-2019/01/633




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