On May 11, 2018, CCI approved acquisition of 74.29% of the equity share capital and management control of Monnet Ispat and Energy Limited (‘Monnet’) by AION Investments Private II Limited (‘AION’) and JSW Steel Limited (‘JSW’) pursuant to a resolution plan under the IBC dated December 12, 2017. The proposed transaction also involved transfer of Monnet’s non-core assets to a newly incorporated entity by way of a slump sale, after which, Monnet proposed to transfer 100% of equity shares of the said newly incorporated entity containing the aforementioned non-core assets.AION, a special purpose vehicle, is wholly owned and controlled by AION Capital Partners Limited (‘APCL’) and operates on investments in stressed, distressed and over leveraged assets in India. JSW is listed on the National Stock Exchange of India Limited and BSE Limited and is a flagship company of the JSW group wherein it is an integrated manufacturer of non-alloyed carbon steel, various categories of alloyed steel, etc. Monnet is listed on the NSE, BSE and the Calcutta Stock Exchange Limited, and is engaged in the manufacture and sale of primary steel and sponge iron, steel and ferro-alloys and mining of minerals like coal and iron ore in India.CCI observed that there were no horizontal overlaps between AION, APCL and Monnet, since neither AION was engaged in the manufacture, production and sale of steel products, nor did APCL hold any investment or exercises any right in any enterprise involved in the steel sector in India. However, CCI noted that activities of JSW and Monnet overlapped in certain activities related to manufacture and sale of: pig iron, sponge iron, semis (specifically billet/blooms), and long products (TMT bars). CCI observed that these products constituted separate relevant markets of their different technical characteristics, price etc. It further noted that the combined market shares of the parties in all the above relevant markets, based on parameters such as installed capacity, gross production and sales, ranged from a miniscule 0-5% - 20-25%. The parties were also subject to significant competitive restraints from other strong market players, including integrated and non-integrated steel producers. Lastly, CCI noted that the parties did not have any existing vertical relationship, and in terms of potential vertical relationships, were constrained by large competitors. Accordingly, CCI concluded that the proposed transaction was not likely to have any AAEC in any market in India, and approved the same.

*Combination Registration No. C-2018/03/561.