Fair trade regulator CCI has approved the proposed deal between DCM Shriram Consolidated Ltd and US-based Axiall related to poly vinyl chloride compounds business.
According to the CCI, the proposed deal is unlikely to raise adverse effect on competition in India.
The proposed deal relates to subscription of 50 per cent stake by Axiall in DCM Shriram's subsidiary, Shriram Vinyl Polytech, an entity involved in the production and sale of poly vinyl chloride (PVC) compounds.
In a order released today, the Competition Commission of India (CCI) said that the proposed deal "is not likely to have appreciable adverse effect on competition in India".
According to the fair trade regulator Axiall does not sell PVC resin or flexible PVC compounds directly into India.
Further, as regards the rigid PVC compounds, its sale by Axiall and Shriram Vinyl in the country "has been minimal", the regulator noted.
"There are major players in the production of PVC in India and a portion of the demand of PVC and PVC compounds is also met through imports, in India," it added.
Axiall is a subsidiary of Axiall Corporation and is engaged in the production of PVC and PVC compounds.
DCM Shriram is a diversified company with business in agriculture, chemicals, plastics, cement, textiles and energy services. DCM Shriram had transferred its PVC compounding business to Shriram Vinyl, last year.
PVC compounds are used in medical equipments, wires and cables as well as pipes and fittings for plumbing and sewage drainage, among others.
The companies had entered into a joint-venture agreement on February 7, this year, following which they had approached CCI for its approval.
CCI had asked Axiall to remove defects and furnish certain information/document(s) regarding the notice by March 10. After seeking extension of time, Axiall had filed its response on March 12, 2014.