CCI approves Haldiram Group Demerger plan

CCI approves Haldiram Group Demerger plan

The Competition Commission of India (CCI) has extended its approval for the demerger of Fast-Moving Consumer Goods (FMCG) business of Haldiram Snacks and Haldiram Foods, as well as the subsequent acquisition of shareholding in the new entity, Haldiram Snacks Food.

Overview of Companies Involved

Haldiram Snacks Private Limited (HSPL) headquartered in Delhi, is a leading manufacturer and distributor of packaged food products in India. The company offers a wide range of products such as snacks, namkeen, sweets, ready-to-eat meals, pre-mix food, frozen food, biscuits, non-carbonated ready-to-drink beverages, and pasta. The operations of HSPL are primarily run by Mr. Manohar Agarwal and Mr. Madhu Sudan Agarwal (Delhi Family).

Haldiram Foods International Private Limited (HFIPL), based in Nagpur, is also engaged in the manufacture and distribution of packaged food products. Their product offerings are similar to those of Haldiram Snacks, including snacks, namkeen, sweets, ready-to-eat meals, biscuits, cookies, non-carbonated ready-to-drink beverages, and pasta. The company’s operations are primarily run by Mr. Kamalkumar Shivkisan Agrawal (Nagpur Family).

Haldiram Snacks Food Private Limited (HSFPL), is a newly incorporated entity that currently does not undertake any business operations. After the proposed transaction, HSFPL will undertake the FMCG business that is currently being managed by HFIPL and HSPL.

The proposed transaction comprises of the following steps:

(i) Demerger: The respective FMCG businesses of HSPL and HFIPL, along with their various associates and subsidiaries, will undergo a demerger through an NCLT (National Company Law Tribunal) approved Scheme of Arrangement.

(ii) Acquisition: Following the demerger, the existing shareholders of HSPL and HFIPL will acquire 56% and 44% shareholding in HSFPL, respectively.

(iii) Restructure: The Proposed Transaction seeks to restructure the FMCG business of HFIPL and HSPL, which will be housed under the newly incorporated HSFPL.

The exact delineation of the relevant markets was left open, since the Proposed Transaction stated that it was unlikely to raise any concerns, irrespective of the manner in which relevant markets were delineated.

Thus, the CCI approved the proposed combination involving the demerger of the FMCG business of Haldiram Snacks and Haldiram Foods into Haldiram Snacks Food.