NEW DELHI: Competition Commission of India (CCI) has approved the proposed acquisition of a Strides ArcolabBSE 1.49 %subsidiary by Mylan Inc, saying the deal will not have an adverse impact on competition in India.
The watchdog's green signal came after these entities modified certain aspects of non-compete pact which was part of the deal.
According to a 'Share Purchase Agreement", Mylan would acquire entire issued and outstanding share capital of Agila Specialties Pvt Ltd -- a subsidiary of pharma firm Strides Arcolab. Agila would be acquired by Mylan directly or through one of its subsidiaries.
The agreement was entered between Mylan, Strides Arcolab and its two promoter entities -- Arun Kumar and Pronomz Ventures LLP -- in February, this year.
Approving the combination, CCI in its order on June 20 said that "the proposed combination is not likely to have an appreciable adverse effect on competition in India".
CCI noted Agila and its subsidiary, Onco Therapies, had insignificant presence in the domestic pharmaceutical market in India and that Mylan's presence was also limited.
Among others, the fair trade regulator said that Mylan and Agila "are not engaged in providing similar or identical or substitutable products in the domestic market in India".
Earlier CCI had raised concerns about the 'Restrictive Covenant Agreement' between the entities, which was to be effective for six years from the date of completion of the proposed combination.
As per that pact, Strides Arcolab and its promoters were not to engage in "the business of developing, manufacturing, distributing, marketing or selling any injectable, parenteral, ophthalmic or oncology pharmaceutical products for human use, anywhere in the world".
The fair trade watchdog had sought detailed justification on the pact and subsequently, the agreement has been modified.
The firms, have now, reduced the duration of the non-compete obligation to four years besides reworking the scope of the convenant to the products manufactured by Agila and Onco.
CCI had observed that the "non-compete covenant" should have covered only those products which are either being made or sold or are under development by Agila and Onco.
Accepting the changes, CCI has directed the companies to incorporate the said modifications and submit a copy of the amended agreements to the regulator "within a period of three months from the date of this order (June 20)".