Press Trust of India
New Delhi, 12 November
Paving way for closure of long- pending Jet-Etihad deal, fair trade regulator Competition Commission of India (CCI) today approved the proposed acquisition of 24 per cent stake in the Naresh Goyal-led Indian carrier by Abu Dhabi-based airline.
Etihad is acquiring this stake for Rs 2,058 crore in a deal that was announced in April this year, becoming the first-ever FDI (Foreign Direct Investment) in an Indian carrier by an overseas airline.
However, the deal has been stuck for months for want of various regulatory approvals. The clearance by the CCI, whose nod is necessary for any major merger and acquisition deal involving an Indian entity, was among the last regulatory approvals for this transaction.
Among others, the deal has been already cleared by capital markets regulator Securities and Exchange Board of India (Sebi), Foreign Investment Promotion Board (FIPB) and Cabinet Committee of Economic Affairs (CCEA).
The deal had to be revised after Sebi raised objections over a previous structure that involved Etihad possibly getting larger control over Jet Airways, which is a publicly listed company in India.
“Considering the facts on record and the details provided in the notice (under relevant section of the Competition Act)… the Commission is of the opinion that the proposed combination is not likely to have appreciable adverse effect on competition in India and therefore, the Commission hereby approves the same,” the CCI said in an order.
The majority order, passed by CCI chairman Ashok Chawla and four members, said that the approval can be revoked if information provided by Jet and Etihad is found to be incorrect at any time.
However, one CCI member passed a minority order dissenting with the majority view and said the deal could have adverse impact on competition in international air travel market.