Fair trade regulator CCI has given the green signal for the proposed deal between VISA Coke and SunCoke Europe Holding, saying the transaction was unlikely to have an adverse impact on competition.
Once the deal is complete, SunCoke would hold 49 per cent in VISA Coke while the remaining 51 per cent would be with VISA Steel.
VISA Coke and KMPL are wholly-owned subsidiaries of VISA Steel. Post deal, KMPL would hold 51 per cent stake in VISA Coke.
SunCoke, incorporated under laws of the The Netherlands, is part of US-based SunCoke Energy.
In an order dated January 15, the Competition Commission of India (CCI) approved the deal and said it was not likely to have an appreciable adverse effect on competition in the country.
The transaction would be done in two stages. Firstly, VISA Steel would transfer its business of manufacturing and sale of metallurgical coke as well as associated steam generation units located in Kalinganagar Industrial Complex, Odisah to Visa Coke.
After that, SunCoke would subscribe to 25 per cent of VISA Coke's equity besides acquiring 24 per cent shareholding in the company from VISA Steel.
"It is observed from the details given in the notice that VISA Steel will source steam for its captive power plants and its entire requirement of coke from VISA Coke.
"However, considering the size of the business of VISA Steel as compared to the total size of the coke sector in India, this vertical relationship between VISA Steel and VISA Coke would also not raise any competitive concern in the coke market in India," the order said.
Currently, SunCoke Energy has no direct or indirect presence in India.
"There is, therefore, no horizontal overlap between the activities of SunCoke and VISA Steel in the domestic market in India.
"Further, the market share of VISA Steel in the domestic market of metallurgical coke in India is also not significant enough to raise any competition concern," the order said.
The notice, seeking CCI approval, was submitted on December 20, 2012, by SunCoke Europe Holdings BV and Visa Coke Ltd.