On March 23, 2022, CCI approved the acquisition of 6.92% of the share capital of Busybees Logistics Solutions Private Limited (‘Xpressbees’) by TPG Growth V SF Markets Pvt. Ltd. (‘TPG SF’) by way of primary and secondary acquisitions. ^[1]

TPG SF is an investment holding company majorly owned and controlled by an entity which is advised by the affiliates of TPG, Inc (‘TPG Group’). TPG Group is global investment firm and has a controlling stake in NewQuest Capital Partners (‘NewQuest Capital’).

Xpressbees is engaged in the business of providing logistics and delivery solution services. Nimbuspost Private Limited (‘Nimbupost’), a subsidiary of Xpressbees, provides tech enabled online logistics aggregation services.

It was submitted by the parties that the transaction ought to have benefited from the minority acquisition exemption under Item 1 of Schedule I of Competition Commission of India (Procedure in regard to the transaction of Business relating to Combinations) Regulations, 2011 (‘Item 1 Exemption’) and was notified to CCI by way of abundant caution. The parties’ rationale was that TPG SF would have a minority shareholding in Xpressbees and TPG SF/ TPG Group did not hold any investment in any entity with horizontal overlaps or vertical relationships with Xpressbees.

In this regard, referring to the requirement of a transaction needing to be “in the ordinary course of business” to avail the Item 1 Exemption, CCI held that transactions in the ordinary course of sale and purchase of securities are done solely with the intent of benefiting from short term price movement of securities, which was not the case with the transaction. Further, CCI noted that acquisitions in the ordinary course of business involving securities do not entail a right to participate in the decisionmaking process of the target, access commercial information, or any other commercially significant arrange (such as those related to strategic course of business or operations). CCI further noted that this was not the case here since TPG SF would have the right to nominate a director onto Xpressbees’ board and participate in matters requiring consent of a certain threshold of investors. Based on the above, CCI held that the transaction could not be considered as being done in the ordinary course of business under the Item I Exemption.

CCI observed that certain portfolio companies with investments by affiliates and/or private equity funds managed by the TPG Group and NewQuest Capital are engaged in the online B2B/B2C sales of products (, which could avail (and some already avail) the logistics services provided by Xpressbees (‘Relevant Portfolio Companies’). As per CCI, this could be viewed as a vertical interface. CCI identified the following markets for its assessment (i) the market for overall logistics services (‘Broad Upstream Market’); and (ii) Market for 3P logistics services (‘Narrow Upstream Market’).

Noting “anywhere shopping” to be one of the important features of e-commerce, CCI observed that the success of e-commerce inter alia relies on efficient delivery of products and end-customer facing third party logistics services for e-commerce (‘3PL for E-commerce’). Based on the volume of procurement for 3PL for E-commerce by the Relevant Portfolio Companies and the presence of other players such as Delhivery and Ecom Express.

Considering the significance and peculiar features of 3PL for E-commerce, CCI noted that 3PL for E-commerce and sales of good through e-commerce exhibit vertical interface. Further, overall logistics industry and overall 3PL service business are broad and encompassed services that are not interchangeable or substitutable to 3PL for E-commerce. Examination at narrower level i.e. 3PL for Ecommerce is warranted to assess likely effect of the vertical interface. However, CCI decided to leave precise delineation of the relevant markets open, as the proposed combination is not likely to raise competition concern, irrespective of the manner in which the relevant market is delineated

Notifying parties in the instant case had submitted that for assessing impact of the current combination, CCI may consider the product markets as (i) Market for overall logistics services (Broad Upstream Market); and (ii) Market for 3P logistics services (Narrow Upstream Market). However, CCI decided to leave precise delineation of the relevant markets open, as the proposed combination ought not to raise competition concerns, irrespective of how relevant market is delineated. Thus, CCI approved the acquisition under Section 31(1) of the Act.

[1] Combination Registration No. C-2022/02/905.