CCI rejects AGI Greenpac plea on INSCO green channel nod for HNG deal

Synopsis

The Competition Commission of India has once again rejected AGI Greenpac's challenge. The regulator upheld the green channel approval for Independent Sugar Corporation's acquisition of Hindusthan National Glass & Industries. AGI Greenpac's concerns about undisclosed equity participants and control transfer were dismissed. The CCI found no significant market overlaps or material changes warranting interference with the approval.

New Delhi: Fair trade regulator CCI, for the second time, rejected a plea filed by AGI Greenpac Ltd challenging the green channel approval granted to the Independent Sugar Corporation Ltd for the acquisition of Hindusthan National Glass & Industries (HNG).

In its latest order dated April 20, the Competition Commission of India (CCI) stated, "There is no merit in the concerns raised by AGI. Accordingly, the representation and follow-up letters are disposed of... and no further orders or directions are required to be passed upon the submissions of AGI."

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The order noted that AGI Greenpac had filed an application seeking revocation of the deemed approval granted to Independent Sugar Corporation Ltd (INSCO) under the green channel route.

Later, it contended that previously undisclosed equity participants had been brought into the deal structure and that the controlling stake had effectively been transferred to such parties.

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The company also raised concerns regarding possible overlaps and sought cancellation of the deemed approval along with regulatory action.

According to the order, the notified transaction envisaged cancellation of the entire existing shareholding of HNG.

Thereafter, INSCO through its special purpose vehicle (SPV) would subscribe to the freshly issued 100 per cent equity share capital of HNG.

Later, INSCO was also to offer a 5 per cent non-controlling minority stake to certain lenders of HNG.

Rejecting the objections, CCI said acquisition of shares by KRPV Fire Fite Pvt Ltd, a wholly-owned subsidiary of INSCO, was not inconsistent with the original filing since the acquisition had been envisaged through an SPV structure.

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The competition watchdog observed that there were no horizontal, vertical or complementary overlaps between the activities of KRPV and HNG.

Therefore, no materially different market dynamics arose from the revised structure that would warrant interference with the deemed approval.

On AGI Greenpac's objection regarding nominee shareholders subscribing to one equity share each, the Commission said such nominal holdings with no rights were insufficient to infer any material change in the notified combination.

CCI also rejected AGI's allegation regarding the participation of IFC as an equity investor after INSCO stated IFC had not subscribed to any equity shares of either HNG or KRPV.

In July last year, CCI dismissed the objections raised by AGI Greenpac Ltd regarding the green channel approval granted to Uganda-based Independent Sugar Corporation for the proposed acquisition of debt-ridden Hindusthan National Glass & Industries.

INSCO had proposed to acquire 100% of HNG's fresh equity, with a 5% minority stake. The filing was made through the green channel route and was deemed approved on submission.

Initially, AGI Greenpac was the frontrunner for HNG with a bid of Rs 2,752 crore. However, the Supreme Court in January 2025 rejected the bid on the grounds that the company did not have a CCI approval for the acquisition.

INSCO had moved the court to cancel AGI Greepac's bid because the company had not received CCI approval.

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