New Delhi: Fair trade regulator CCI has approved the proposed joint venture between Mitsubishi-Hitachi Metals Machinery and German conglomerate Siemens in respect of metal plant building business.
According to the Competition Commission of India (CCI), "the proposed combination is not likely to have an appreciable adverse effect on competition in India, in the overall market(s) of mechanical or electrical plant building or in the processes comprising these segments".
Under the proposed deal, Mitsubishi-Hitachi Metals Machinery (MHMM) would own 51 percent stake in the joint venture, while 49 percent will be held by Siemens.
The joint venture would focus on the business of metal plant building solutions and related services.
As per the agreements, MHMM would "contribute its metal plant building business to the proposed joint venture" and Siemens "would carve out its metal plant building business to be transferred to the proposed joint venture".
MHMM is a joint venture company established in the year 2000 by the combination of steel production and machinery divisions of Mitsubishi Heavy Industries and Hitachi Ltd.
In India, MHMM operates through its subsidiaries -- Mitsubishi-Hitachi Metals Machinery South Asia Private Ltd and Concast (India) Ltd.
On the other hand, Siemens Aktiengesellschaf is engaged in many activities like energy, healthcare and infrastructure.
In the order released today, the Commission said that "the parties are not close competitors in either the overall market(s) of mechanical or electrical plant building or in the processes comprising these market segments.
The metal plant building business involves designing and installing of the production machinery in the metallurgical plants as well as related maintenance and support services.
Metal plant building can be further classified into mechanical and electrical metal plant building.
Agreements for the proposed joint venture were entered by MHMM and Siemens on May 6, 2014, following which they had approached CCI for its approval in the same year.
