CCI Approves LIC Mutual Fund-IDBI Mutual Fund Deal
CCI Approves LIC Mutual Fund-IDBI Mutual Fund Deal
The Competition Commission of India (CCI) has approved the proposed combination involving LIC Mutual Fund Asset Management Limited’s acquisition of the management rights over the schemes of IDBI MF from IDBI Asset Management Limited.
The proposed combination entailed that LIC Mutual Fund Asset Management Limited (LIC AMC)’s acquisition of the rights to manage and administer the schemes of IDBI Mutual Fund (IDBI MF) from IDBI Asset Management Limited (IDBI AMC).
Consequently, the schemes of IDBI MF will form part of LIC Mutual Fund (LIC MF) with LIC AMC acting as the asset management company for the schemes of IDBI MF and LIC TC acting as the trustee company of the schemes of IDBI MF; and as part of consideration, apart from lump sum consideration, IDBI AMC will also acquire certain non-controlling shareholding in LIC AMC.
Life Insurance Corporation of India (“LIC”) is the sponsor of LIC MF. LIC is the ultimate parent company of LIC AMC and LIC TC. LIC AMC and LIC TC belong to the “LIC Group.” LIC AMC acts as the asset management company to LIC MF, while LIC TC acts as the trustee company of LIC MF in India.
IDBI Bank Ltd. is the sponsor of IDBI MF. IDBI AMC’s principal activity is to act as asset management company to the IDBI MF, while IDBI TC acts as the trustee company of IDBI MF in India.
The Proposed Transaction will not result in a change in the competitive landscape in the relevant markets identified above.
The Proposed Combination will not lead to any change in the competitive landscape or cause any appreciable adverse effect on competition (“AAEC”) market in India on account of a highly competitive and segregated market, the presence of significant competitors, the absence of the ability or incentive to cause any foreclosure, and significant regulatory supervision in the overlapping markets by Securities Exchange Board of India.
Deals beyond a certain threshold require approval from the regulator, which keeps a tab on unfair business practices in the market place.
