Paving way for closure of long-pending Jet Airways, Etihad Airways deal, fair trade regulator CCI today approved the proposed acquisition of 24 per cent stake in the Naresh Goyal-led Indian carrier by Abu Dhabi-based airline.
Etihad Airways 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 Competition Commission of India (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 with Jet Airways has already been cleared by capital markets regulator 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 Airways 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," 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 Airways and Etihad Airways 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. Dissenting member Anurag Goel said he was "of the prima facie opinion that the proposed combination is likely to cause an appreciable adverse effect on competition within the market of international air passenger transportation from and to India."
"A notice may, therefore, be issued to show cause to the parties to the combination calling upon them to respond within thirty days of the receipt of the notice, as to why investigation in respect of the proposed combination should not be conducted," his dissent order said.
The Commission said the approval to Jet Airways and Etihad Airways is granted on the basis of "underlying competition assessment" based on information provided by