On October 18, 2021, CCI approved the acquisition of 100% interest in the worldwide healthcare business process outsourcing (‘BPO’) services of Hinduja Global Solutions Limited (‘HGS’) along with certain assets, contracts and employees (‘Target Business’) by Betaine B.V. (‘Betaine’) from Hinduja Global Solutions Limited (‘HGS’).^[1]

Betaine, incorporated in Netherlands, is an entity ultimately owned and controlled by Baring Asia Private Equity Fund VIII, a fund affiliated with Baring Private Equity Asia Pte. Limited (‘BPEA’). BPEA is an international private equity firm that has various investments in Asia, including in entities that are engaged in the provision of Information Technology (‘IT’) and IT Enabled Services (‘ITeS’) services and BPO services in India. On the other hand, the Target Business comprises IT and ITeS services and BPO services offered by HGS and caters primarily to customers within the healthcare segment. The Target Business is engaged in providing, inter alia, healthcare member lifecycle management services, healthcare provider lifecycle management services, healthcare claims benefits management services, healthcare claims benefits management services, healthcare medical cost management services and healthcare revenue cycle management services.

BPEA submitted that the Target Business did not offer any services in India, and currently, all the customers of the Target Business are overseas group companies of HGS. Given this, it was argued that there were no actual overlaps between the business activities of the portfolio companies of BPEA (which provided IT and ITeS services and BPO services in India) and the Target Business. CCI was, however, of the view that entities operating in India, but providing IT and ITeS services and BPO services largely or solely to customers located outside India, may still exert competition constraints on suppliers that focus largely or solely on providing IT and ITeS services and BPO services in India. For this reason, CCI dismissed the arguments suggested by BPEA and assessed the horizontal overlap between BPEA (through its portfolio companies) and the Target Business for provision of IT and ITeS services and BPO services. CCI noted that the BPO services provided by BPEA (through its portfolio companies) and the Target Business are for the healthcare BPO segment, which is a specialized sub-segment in this market and involves niche services like medical coding, claims processing and data processing services. Healthcare BPO service providers are also required to have expertise and domain knowledge related to the healthcare industry. CCI thus assessed the horizontal overlaps in the narrower healthcare BPO services market, which would be distinguishable from the broader BPO services market.

In its competition assessment, CCI noted that the combined market shares of BPEA (through its portfolio companies) and the Target Business was in the range of 0% – 5% for each of the overlapping relevant markets, i.e., market for provision of IT and ITeS services, provision of BPO services and the narrower market for provisions of BPO services in the healthcare segment. Pertinently, CCI also directed BPEA to aggregate the market shares of Global Content Alpha Partners HoldCo. Pte. Limited (‘GCAPH’), an entity which BPEA was in the process of acquiring equity stake and was engaged in the market for provision of IT and ITeS services and BPO services. CCI in its order also clarified that the competition assessment provided by notifying parties should also factor in any changing market dynamics on account of future investments or acquisitions. On that basis, the market shares of GCAPH were also aggregated and were ultimately factored in by CCI in its competition assessment.

Therefore, given the insignificant market shares of BPEA and the Target Business in all overlapping markets, CCI approved the proposed transaction.

[1] Combination Registration No. C-2021/08/870.