New Delhi: Fair trade regulator CCI has approved Reliance Industries' proposed deal to sell 49 percent stake in a newly-formed textile firm to Chinese company RuYi, saying the deal does not raise anti-competitive concerns.
Under the proposed deal, CSTT Co Holdings -- an investment arm of textile firm RuYi -- would acquire 49 percent stake in a textile company to be incorporated by RIL as its wholly owned subsidiary. The subsidiary will house RIL's textile business.
The combination also involves licensing of the 'Georgia Gullini' trademark by Gullini Fashions Private Ltd -- an Indian arm of China-based textile firm RuYi.
Further, RIL's trademark 'Vimal' would be licensed to the textile company.
Textile happens to be founding business of USD 75-billion RIL group, which has since emerged as a major player in energy and retail businesses and is now expanding big time into telecom arena as well, among others.
In an order released today, the Competition Commission of India (CCI) said "the proposed combination is not likely to have an appreciable adverse effect on competition in India".
According to the Commission, RIL and RuYi have an overlap in men's shirting, suiting and trouser fabric and in the men's readymade trouser segments of the textile industry.
"It is observed that in all these segments, the share of both RuYi and RIL is insignificant and numbers of other players are present," CCI said.
"As regards the vertical relationship between RIL and RuYi, it is observed that the same is insignificant and unlikely to give rise to competition concerns," it added.
The textile division of RIL is into manufacture yarn, fabric for men's suiting, trousers and shirting, among others.
On January 7, the CCI had received a CSTT Co Holdings received a notice seeking the regulator's nod on the deal.
