CCI Approves Napean’s Acquisition of a Minority Stake in SBI General Insurance

On December 13, 2019, CCI approved the acquisition of a 16.01% of the paid up share capital of SBI General Life Insurance (‘SBI-IAG’) by Napean Opportunities LLP (‘Napean’), through the purchase of shares from IAG International Pty. Limited (‘IAG’)[1].

Napean is a newly incorporated entity, which belongs to the PI Opportunities Fund – I (‘PIOF-I’), and Azim Premji Trust (‘APT’). PIOF-I is a Category II alternative investment fund, registered under Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 while APT is a private trust incorporated under the Indian Trusts Act, 1882. Hereinafter, PIOF-I and APT are collectively referred to as ‘Acquirer Group’.

SBI-IAG, a joint venture between SBI and IAG, is engaged in the business of providing general insurance products in India. These products range from motor, health, personal accident, travel and home insurances in the retail space and aviation, fire, marine, package, construction and engineering and liability insurance in the commercial space. Napean/Acquirer Group (including certain of their portfolio companies), are not engaged in any business activities relating to similar or identical or substitutable products or services with SBI-IAG’s business.

Therefore, CCI approved the combination, given that there were no direct/indirect horizontal overlaps between the parties to the combination. While one of the portfolio companies of the Acquirer Group is engaged in the market for distribution of general insurance products and is therefore vertically related to the SBI-IAG’s business activity: (i) the distribution of general insurance products is highly fragmented (because of the presence of a large number of players); and (ii) this vertical relationship may not cause any competition concerns, as parties to the combinaton don’t have the ability or incentive to foreclose competition in these markets.

[1] Combination Registration No. C-2019/11/702.

Published In:Inter Alia Special Edition- Competition Law - March 2020 [ English
Date: March 30, 2020