CCI Approves Liberty House’s Acquisition of Amtek Auto Limited

On September 11, 2018, CCI approved Liberty House Group Pte. Ltd.’s (‘Liberty House’) 100% acquisition of Amtek Auto Limited (‘Amtek Auto).[1] Liberty House’s resolution plan for acquisition of Amtek Auto filed under the Insolvency and Bankruptcy Code, 2016 (‘IBC’) was approved by a Committee of Creditors (‘CoC’) and the National Company Law Tribunal (‘NCLT’).

Liberty House also submitted details of its resolution plan under the IBC for the acquisition of Adhunik Metaliks Limited (‘Adhunik’), which was approved by the CoC and the NCLT. CCI carried out the competition assessment in light of this development.

In its assessment, CCI noted that Liberty House and Amtek Auto overlap in the business of connecting rods. A connecting rod is a component of an automobiles’ engine that transfers motion from the piston to the crankshaft and functions as a lever arm. Liberty House submitted that connecting rods differ based on the size of vehicles, like two-wheeler, three-wheeler and a heavy vehicle, and are manufactured for specific model types. It was submitted that the connecting rods supplied by Liberty House are aluminum -based while those of Amtek Auto are micro-alloy and carbon steels based.

Further, the acquisition of Adhunik by Liberty House created a vertical relationship between the parties, since Adhunik supplied alloy based non-flat steel rolled products, which is an upstream business segment to Amtek Auto. CCI noted that this vertical relationship is not likely to result in any competition concern as original equipment manufacturers (‘OEMs’) largely determine the type and grade of inputs, and there are other players present in this upstream business segment. Therefore, the combination was not likely to cause any appreciable adverse effect on competition in India.

Based on the above, the combination was approved by CCI.

[1] Combination Registration No. C-2018/09/599.

Published In:Inter Alia Special Edition Competition Law December 2018 [ English
Date: December 31, 2018