CCI clears Patanjali, 5 other entities' proposal to acquire 98% stake in Magma Gen Insurance

The Competition Commission of India (CCI) has cleared a proposal of Patanjali Ayurved and five other entities to acquire a majority stake in Magma General Insurance.

“The proposed combination is being notified under the green channel route in consonance with section 6(4) of the Competition Act, 2002," CCI said in a notice.

Under the green channel route, a transaction which does not pose any risk of an appreciable adverse effect on competition is deemed to be approved on being intimated to the competition watchdog.

Apart from Patanjali Ayurved, the entities participating in the transaction are S R Foundation, Riti Foundation, RR Foundation, Suruchi Foundation and Swati Foundation.

"The acquirers propose to acquire 98.055% shareholding of the target (Magma General Insurance Ltd) on a fully diluted basis by way of share purchase," a notice submitted to the CCI said on Tuesday.

Yoga guru Baba Ramdev's Patanjali Ayurved Ltd (PAL) is engaged in manufacturing and marketing of herbal nature-based products, medicines and other fast moving consumer goods.

The foundations, on their part, view the deal as a compelling investment to diversify into a rapidly growing market segment. They aim to expand their footprints into new sectors to create a diversified business portfolio.

Following the CCI approval, Patanjali Ayurved will assume the role of Magma General Insurance's promoter entity. This will further diversify Patanjali's portfolio, which currently focuses on healthcare and FMCG.

"The activities of the parties (including their affiliates) do not exhibit any horizontal overlaps, vertical relationships, or complementary linkages in any of the plausible relevant markets in India," the notice said.