On April 13, 2020, CCI approved Emerald Sage Investment Limited’s (‘ESIL’) acquisition of compulsorily convertible preferences shares (‘CCPS’) in Apollo Tyres Limited (‘Apollo’)^[1]. The CCPS would constitute approximately 9.93% of the post-issue share capital of Apollo. Additionally, ESIL would acquire rights to: (i) appoint a non-executive director on the board of directors of Apollo (‘Investor Director’) and two of its subsidiaries based outside India; and (ii) nominate the Investor Director on various board committees of Apollo.

Apollo is the parent company of Apollo group, and its principal business activity is manufacturing and sale of automotive tyres.

ESIL is an investment holding company, wholly owned by certain private equity funds managed by Warburg Pincus LLC (‘Warburg’), which indirectly holds 8.92% of Apollo’s shareholding. Post the transaction, Warburg’s shareholding in Apollo would increase to approximately 17.97%.

CCI noted the absence of horizontal overlaps between ESIL, Warburg’s portfolio companies, and Apollo. While Warburg group has investments in logistic service providers, which may buy automotive tyres in limited quantities, CCI noted that transaction was unlikely to have any AAEC in India and approved it accordingly.

[1] Combination Registration No. C-2020/03/738.