The Competition Commission of India (CCI) has cleared the proposed acquisition of up to 38% stake in MG Motor India by JSW Ventures Singapore, a subsidiary of JSW International Tradecorp and part of JSW Group. The deal is expected to boost the growth prospects of MG Motor India, which is engaged in the manufacturing and sale of passenger cars, including electric vehicles, under the brand ‘MG’.
Background of the deal
JSW Ventures Singapore is a newly incorporated entity and is not engaged in any activities as of date. It is a wholly-owned subsidiary of JSW International Tradecorp Pte and belongs to JSW Group, which is one of India’s leading business conglomerates with interests in steel, energy, infrastructure, cement, sports, and venture capital.
MG Motor India is a company incorporated in India and is a wholly-owned subsidiary of SAIC Motor Corporation Limited, which is one of the largest automobile manufacturers in China. MG Motor India was established in 2017 and launched its first product, the MG Hector, in 2019. Since then, it has expanded its portfolio with models such as MG ZS EV, MG Gloster, and MG Astor.
Rationale and benefits of the deal
The deal is expected to provide strategic and financial benefits to both JSW Group and MG Motor India. For JSW Group, the deal will enable it to enter the fast-growing automobile sector in India and leverage its expertise in steel, energy, and infrastructure to support the growth of MG Motor India. For MG Motor India, the deal will provide access to additional capital and resources from JSW Group to expand its product range, enhance its technology capabilities, and increase its market share.
The deal will also strengthen the bilateral ties between India and China in the automobile sector, as both countries are among the largest markets for passenger cars in the world. The deal will also contribute to the government’s initiatives such as Make in India, Atmanirbhar Bharat, and Electric Mobility Mission.
Approval from CCI
The deal was approved by the CCI on January 23, 2024, after it found that the proposed acquisition does not raise any competition concerns in the relevant market. The CCI noted that JSW Ventures Singapore and MG Motor India are not engaged in any overlapping or vertically related activities in India. The CCI also observed that there are several other players in the market for passenger cars in India, which offer sufficient competitive constraints to the parties.
The CCI’s approval is subject to compliance with certain conditions imposed by it, such as maintaining separate accounts for JSW Ventures Singapore and MG Motor India, submitting periodic reports on their activities to the CCI, and seeking prior approval from the CCI for any further acquisitions or mergers involving MG Motor India.