By way of a March 31 2017 order, the Competition Commission of India (CCI) approved the National Building Construction Corporation's (NBCC) acquisition of a 51% shareholding in Hindustan Steel Works Construction Limited (HSCL).(1)
Central public sector enterprise NBCC provides construction services directly and through its subsidiaries, and operates in project management consultancy, engineering procurement, construction and real estate. It has a pan-India presence and has undertaken projects abroad.
HSCL was initially set up to mobilise the indigenous capability of erecting integrated steel plants. It has now diversified into other sectors, including civil and building construction, rods and railway projects. However, it does not have a presence in the overseas market.
The CCI noted that the NBCC and HSCL are competitors in engineering procurement, construction and project management consultancy. However, the companies have no significant presence in any markets likely to be affected by the proposed acquisition and the combined entity would continue to face constraints from other competitors (eg, Larsen and Toubro, Reliance Infrastructure, Nagarjuna Construction Company Limited, Gammon and Lanco). Therefore, the CCI held that the proposed acquisition was unlikely to have any appreciable adverse effect on competition in the relevant Indian market. The acquisition was thereby approved under Section 31(1) of the Competition Act.
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(1) CCI decision dated March 31 2017. The full text is available here.
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