The Competition Commission of India (CCI) said on Thursday it has cleared British energy giant BP’s 49% investment in Reliance Industries’ fuel retailing business announced last year.
The competition regulator said in a statement that the deal involves transfer of RIL’s petroleum retail business and certain aviation assets at airports to a new company called Reliance BP Mobility Ltd. (RBPML), in which BP Global will invest 49%. The ₹7,000 crore deal was announced last August.
The regulator did not mention any suggestions for modifying the proposed transaction as BP Global does not have any operations in India. Competition regulators suggest modifications to transactions where the parties have competing businesses and the transaction may stifle competition in the market.
Private investor interest in India’s auto fuel retailing business has grown after India did away with subsidy for petrol and diesel which distorted the market by giving an unfair edge to state-run companies.
Auto fuel retailing is a low-margin, large volume business. Retailers, therefore, try to create revenue streams by offering value added services such as shopping facilities at filling stations. Although India is making steps towards electric mobility, the high cost of electric cars and lack of adequate charging infrastructure imply that conventional fuel will continue to dominate the auto industry in the foreseeable future.
CCI also approved the acquisition of less than 5% stake in Intas Pharmaceuticals Ltd. by Mauritius-based Canary Investments Ltd. and Link Investment Trust II. In another statement, CCI said it also approved the acquisition of 100% shares and control of Tech Data Corp. by Tiger Midco LLC.