Competition Commission Approves ITC's Hotel Business Demerger Plan

Competition Commission Approves ITC's Hotel Business Demerger Plan

On Tuesday, the fair-trade regulator CCI announced its approval for the demerger of ITC Ltd.'s hotel business into a separate entity. Following the demerger's completion, shares of the newly formed entity, ITC Hotels Ltd., will be listed on the stock exchanges.

The proposed combination involves the demerger of the hotel business to ITC's wholly-owned subsidiary, ITC Hotels, which was recently incorporated.

ITC boasts diverse business operations in India, including FMCG, hotels, paperboards, paper and packaging, and agribusiness.

ITC stated in the notice that the proposed combination is solely an internal restructuring exercise and will not lead to any changes in market dynamics.

The Competition Commission of India (CCI) confirmed the approval of the demerger of ITC Ltd's Hotels Business to its wholly-owned subsidiary.

In July 2023, ITC announced its intention to demerge its hotel business by establishing its wholly-owned subsidiary, ITC Hotels Ltd.

Additionally, the company's board has sanctioned the incorporation of ITC Hotels Ltd., which will manage its hotels and hospitality business.

Post-demerger, shares of ITC Hotels will be listed. According to information on the CCI website, ITC will retain a 40 percent stake, while the remaining 60 percent will be held by the conglomerate's shareholders.

Launched in 1975, ITC Hotels, India's premier chain of luxury hotels, has over 115 hotels in 80+ destinations across six distinct brands.

In another announcement by the CCI, the regulator approved the right to nominate a director on the board of directors of the Embassy Office Parks REIT by APAC Company XXIII Ltd. and Kotak Performing RE Credit Strategy Fund I. APAC Company XXIII Ltd. is owned and managed by funds associated with the US-based private equity firm Bain Capital, while Kotak Performing RE Credit Strategy Fund I is a Sebi-registered alternative investment fund managed by Kotak Alternate Asset Managers Ltd. The Bengaluru-based REIT specializes in operating and investing in rental and income-generating real estate and associated assets in India.

In a separate disclosure, the competition watchdog indicated its approval of the transfer of the chassis and BIW businesses of Magna India to SKH M India, to be jointly controlled thereafter by SKH SMC, SKH LLP, and Magna India. SKH SMC is involved in manufacturing fuel tanks, chassis, BIW parts, and seat structures for passenger vehicles, while SKH LLP offers management services to Krishna Group companies. Magna India specializes in producing structural assemblies, components, sub-assemblies, and modules, including chassis and BIW components.

The CCI confirmed that it had cleared these deals on Tuesday.

Transactions exceeding a certain threshold necessitate approval from the regulator, which oversees unfair business practices and fosters equitable competition in the marketplace.