Fair trade watchdog CCI has cleared Singapore-based Wilmar Sugar Holdings proposed plan to purchase shares in Renuka Sugars, saying the deal will not ave an adverse impact on competition in the country.
Under the proposed deal, Wilmar would acquire shares of Renuka Sugars, a domestic firm, pursuant to a preferential allotment and a consequential open offer to the shareholders.
In an order released on Tuesday, the Competition Commission of India (CCI) said: "The proposed combination is not likely to have an appreciable adverse effect on competition in India".
The watchdog observed that Wilmar had no presence in India in the business of refining of raw sugar, production of sugar and ethanol derived from sugarcane and generation of electricity/power from bagasse.
It also stated that Wilmar had relatively insignificant exports and imports of sugar from/to India during the preceding financial year.
"In view of the foregoing and considering the presence of a large number of organised and unorganised players in sugar industry in India, the proposed combination is not likely to give rise to any competition concern in India," it added.
As per the deal, Wilmar would be required to make an open offer to the public shareholders of Renuka Sugars to acquire up to 26 per cent of the company.
In terms of the open offer, Wilmar and Singapore-based SRS Investments would acquire the shares tendered in the open offer as agreed between them, the order said.
Renuka Sugars is engaged in the business of refining of raw sugar, production of sugar and ethanol derived from sugarcane, among others.
Wilmar is part of the Wilmar International Ltd group that has various business interests such as in oil palm cultivation, oilseeds crushing, sugar milling and refining.
The companies had entered into agreements on February 20 following which they had filed a notice seeking the Commission's approval on March 11.