The Competition Commission of India (CCI) has approved the Samara Capital-Amazon joint bid to acquire Aditya Birla Group‘s supermarket chain More.
However, the fair trade watchdog has done due diligence of the deal only from the point of impact on competition, and it’s for the Samara-Amazon JV Witzig to ensure that the deal is in compliance with the revised e-commerce FDI norms issued last month, two senior industry executives said.
CCI on Wednesday had sent a communication to Witzig Advisory Services, the entity where Samara and Amazon will invest and which is acquiring Aditya Birla Retail, saying that the proposal is “approved”, without elaborating further.
“A detailed order is expected from CCI soon which may specify certain conditions,” said one of the executives cited earlier. “But there may not be anything major in that since the ownership and deal structure are not in CCI’s domain directly.”
Issues of ownership and deal structure are under the domain of the Department of Industrial Policy and Promotion (DIPP), which notified the new FDI norms for e-commerce marketplaces last month.
“Samara-Amazon may still have to modify the deal structure to be compliant with the DIPP notification; otherwise, it can risk itself into legal problems,” the executive told ET.
Emails sent to Witzig and Amazon did not elicit any response as of press time Thursday. Samara Capital MD Sumeet Narang declined to comment.
Witzig, a wholly-owned subsidiary of Samara Alternative Investment Fund, signed an agreement to acquire ABRL in September for about Rs 4,200 crore and filed an application to CCI for clearance in October. In the application, it said Amazon.com NV Investment will acquire 49% in Witzig while Samara will control the company with majority 51% stake. Amazon is yet to acquire the stake since it has been awaiting CCI approval.
The revised DIPP norms may make it difficult for Amazon to strengthen the relationship between its India marketplace, amazon.in, and More supermarkets and use the latter as a seller on its hyperlocal food and grocery platform, Amazon Prime Now. This is because the new FDI norms prohibit group companies from selling on e-commerce marketplaces.
Leave a Reply