On June 18, 2024, the CCI approved the transaction involving the members of the Adi Godrej and family (‘ABG Family’), Nadir Godrej and family (‘NBG Family’), Jamshyd Godrej and family (‘JNG Family’) and Smita Crishna and family (‘SVC Family’) (collectively referred to as the ‘Parties/Family Branches’) for the realignment of interests, legal ownership, and management of various entities within the Godrej group. ^[1]

Description of Transaction and Parties

On May 15, 2024, a Notice was filed jointly by the Parties pursuant to a family settlement agreement dated April 30, 2024, executed by the members of the Family Branches (‘FSA’). The Family Branches also executed a brand and non-compete agreement dated April 30, 2024 (‘Brand Agreement’), to govern the use of the ‘Godrej’ brand by the Family Branches, post the Proposed Combination (as defined below).

The Proposed Combination (as defined below) envisages a reorganisation of interests, ownership, and management across various entities within the Godrej group, which operates in multiple business sectors. The entities within the Godrej group that are part of this reorganisation are classified into two main groups: the GILAC Group Entities and the G&B Group Entities (collectively referred as ‘Targets’).

The GILAC Group Entities include Godrej Industries Limited (‘GIL’), Godrej Consumer Products Limited (‘GCPL’), Godrej Properties Limited (‘GPL’), Godrej Agrovet Limited (‘GAVL’), Godrej Seeds & Genetics Limited (‘GSGL’), Innovia Multiventures Private Limited (‘IMPL’), Astec Lifesciences Limited (‘Astec’) and Anamudi Real Estates LLP (‘Anamudi’). On the other hand, the G&B Group Entities comprise of Godrej & Boyce Manufacturing Company Limited (‘G&B Mfg’), Godrej Holdings Private Limited (‘GHPL’), Godrej Infotech Limited (‘GITL’), and RKN Enterprises (‘RKNE’).

The reorganisation plan involves several key steps, including the restructuring of shareholding, adjusting the composition of the board of directors and management, and reclassifying certain family members as public shareholders in relation to the Targets, with an ultimate objective of ensuring that the ABG and NBG Families continue to control and manage the GILAC Group Entities, while the JNG and SVC Families retain control over the G&B Group Entities (collectively referred to as the ‘Proposed Combination’). The use of the ‘Godrej’ brand by the Family Branches post the Proposed Combination will be governed in accordance with the Brand Agreement.

Overlaps and Assessment by CCI

The CCI considered existing/potential market overlaps between: (i) the activities of entities outside of Godrej group in which the ABG Family and NBG Family hold shareholding/control (‘ABG NBG Investee Entities’) and the activities of GILAC Group Entities; and (ii) the activities of entities outside of Godrej group in which the JNG Family and the SVC Family hold shareholding/control in any entity(ies) (‘JNG SVC Investee Entities’) and the activities of G&B Group Entities:

i.     ABG NBG Investee Entities and GILAC Group Entities: Horizontal overlaps in real estate development and vertical overlaps between home automation items (upstream) and real estate properties (downstream); and

ii.   JNG SVC Investee Entities and G&B Group Entities: Horizontal overlaps in real estate development and school education services, and vertical overlaps between ready-mix concrete (upstream) and real estate development (downstream), as well as wall forming building materials (upstream) and real estate development (downstream).

Assessment: The CCI noted that the Proposed Combination is primarily an internal reorganisation and is unlikely to change market dynamics significantly. The CCI found that the overlaps are not substantial enough to affect competition adversely.

Thus, the CCI concluded that the Proposed Combination is unlikely to result in an appreciable adverse effect on competition in India. Therefore, in the absence of any competition concerns, the CCI approved the Proposed Combination.

[1] Adi Godrej and family/Nadir Godrej and family/Jamshyd Godrej and family/Smita Crishna and family (Combination Registration No. C-2024/05/1146).