The Competition Commission of India has approved the proposed amalgamation of Maruti Suzuki India Ltd (MSI) and Suzuki Powertrain India Ltd (SPIL).

In June, Maruti Suzuki had said that it would merge its engine and transmission maker Suzuki Powertrain with itself to meet the growing demand for diesel vehicles.

“The commission is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India and, therefore, the commission approves the proposed combination,” an order said.

Suzuki Motor Corporation holds 70 per cent stake in Suzuki Powertrain, while the rest is held by Maruti Suzuki.

The control over the activities carried on by MSI and SPIL before and after the proposed combination remains with Suzuki Motor Corporation, therefore, the proposed combination is not likely to give rise to any adverse competition concern in India, the order added.

Post merger, Suzuki Motor Company’s stake in MSI will go up to 56.2 per cent from 54.2 per cent due to a share swap agreement with the domestic car market leader to acquire SPIL.

“The merger promises multiple benefits, especially when we consider the increasing dieselisation of the Indian car market. With this, Maruti Suzuki will be able to bring all its diesel engine operations under a single management,” the MSI Managing Director and CEO, Mr S. Nakanishi, had said recently.

The shares of Maruti Suzuki closed at Rs 1,133.05 on the BSE up 1.15 per cent from previous close.

(This article was published on July 31, 2012)
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