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Wednesday, August 29, 2012

Competition Commision of India approves Birla group's 27.5% stake in Living Media

New Delhi (PTI) : Competition Commission of India (CCI) today said it has approved Aditya Birla group's purchase of 27.5% stake in Living Media India Ltd, the holding firm of media giant India Today Group.The stake is being purchased through IGH Holdings Private Ltd, an investment company of industrialist Kumar Mangalam Birla-led business conglomerate. The two groups had announced this transaction earlier in May this year.In its order, dated August 14 and made public today, CCI observed that both Aditya Birla group and India Today Group are engaged in the retail business, but the transaction "is not likely to have an appreciable adverse effect on competition in India", and therefore it has approved the deal.

The CCI said it received an application for its approval to the deal on June 18, after which it had sought certain information and documents from IGH Holdings.The proposed transaction involves an initial acquisition of 24.9% stake in Living Media India by IGH and an additional purchase of 2.6% stake, resulting into a total purchase of 27.5% equity.The companies said in their applications to CCI that the said purchase of shares of Living Media by IGH may go up to a maximum of 49%, and the proposed acquisitions and valuation adjustments should be completed within six months from the end of the financial year 2015-16.

As per the CCI order, the companies had further said that the initial purchase of 24.9% stake and the subsequent acquisitions, including the purchases due to valuation adjustments, are inter-related and inter-dependent and the CCI approval has been sought for the proposed acquisition of equity shareholding of up to 49% of Living Media by IGH Holdings.As per the details provided by the companies to CCI, there are certain conditions precedent in the share subscription and purchase agreement (SSPA) which related to certain transfer to and from Living Media, pursuant to which some businesses of Living Media, including Thomson Press (India), its subsidiaries and some other businesses would be hived off.

After such transfers, the subsidiaries and associate firms of Livin Media would include TV Today Network, ITAS Media, Today Retail Network, Today Merchandise, Harper Collins, Mail Today Newspapers, India Today Online, Universal Learn Today, Integrated Databases India and Automotive Exchange Pvt Ltd. After the transaction, IGH would have certain statutory rights in Living Media, along with the contractual rights of the shareholders agreement.