CCI gives green signal to Mitsubishi-Hitachi joint venture

NEW DELHI: Fair trade regulator CCI has approved the proposal of Japanese majors Mitsubishi Heavy Industries and Hitachi to integrate their businesses in certain segments including power generation operations.

"...the proposed combination is not likely to have an appreciable adverse effect on competition in India and therefore, the Commission hereby approves the proposed combination under...the (Competition) Act," Competition Commission of India (CCI) said in an order dated November 6.

As per the proposed deal entered between the firms in June this year, Mitsubishi Heavy Industries and Hitachi would combine their businesses in thermal power generation system, geothermal power system, environmental equipment and fuel cells into a newly incorporated joint venture entity.

Mitsubishi Heavy Industries and Hitachi would hold equity interest in the ratio of 65:35 in the new entity which would be jointly controlled by the firms.

In India, formation of the joint venture would see integration of the companies thermal power and environmental equipment businesses, as per the notice submitted to CCI.

Among others, the regulator observed that of the total domestic manufacturing capacity for the BTG (Boilers, Turbines and Generators) equipments in India, which form the core of thermal power generation, the combined market share of Mitsubishi and Hitachi through their respective joint ventures in India would be around 20 per cent.

However, CCI said: "The presence of over-capacity in the domestic BTG manufacturing sector as well as the competitive constraint posed by other significant players in the market including imports, it is considered that the proposed combination is not likely to raise any appreciable adverse effect on competition".

Mitsubishi operates here through Mitsubishi Heavy Industries India and has power plants, environmental equipment and air-conditioning businesses in the country.

Hitachi operates through a number of subsidiaries in the country and sells a products like industrial components & equipment, air conditioning & refrigeration equipment.

The companies had approached CCI for its approval on July 10, 2013.