Boston, MA 08/28/2014 (wallstreetpr) – According to reports, Sanofi SA (ADR) (NYSE:SNY) has got the green light from the Competition Commission of India in regard with its proposed purchase deal of an arm of Apollo. The representatives of CCI said that they did not found any sign of unfair business practice in this deal.
What’s in SNY-Apollo Deal:
Sanofi SA (ADR) (NYSE:SNY) would acquire 20% stake in Apollo Sugar Clinics Ltd (ASCL) under this deal. Other than the 20% stake, SNY will also get certain management rights in ASCL, which is a subsidiary company of Apollo Health and Lifestyle. SNY will be able to increase its holding in ASCL up to 26% if needed during a certain period. As soon as this deal takes place, Apollo group would have to transfer its operational clinics to Apollo Sugar Clinics Ltd.
According to a statement released by competition watchdog on Wednesday, “The proposed deal between Sanofi SA (ADR) (NYSE:SNY) and ASCL will not have an adverse effect on competition in India.” Although both SNY and ASCL are into the same industry, but they operate in different supply chain levels; hence, there will not be any risk of horizontal overleaping. There are various sugar centers functioning within the different departments of Apollo Group. Once the transaction gets executed, Apollo group’s reach in regard with sugar centers will be strengthened.
Both the companies i.e. Sanofi SA (ADR) (NYSE:SNY) and ASCL are not competitors of each others, hence even after the execution of the current transaction; both of them will be able to function freely. No competitor will be removed from the market. The Competition Commission of India noted that the relationship between ASCL and SNY at different levels of supply chain management will enable both the companies to enhance their expertise. It will be not only beneficial in terms of operational, but also financial independence as well. The agreement had been signed by both the companies a few days ago on August 25, 2014.
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