CCI approves purchase of 50% stake of Tata’s Trent Hypermarket by Tesco

The Competition Commission India (CCI) approved British retail giant Tesco’s acquisition of a 50% stake in Tata Group firm Trent Hypermarket, the first Foreign Direct Investment (FDI) transaction in multi-brand retail since the sector was opened up in 2012. As per CCI, it doesn’t expect the proposed combination “to have appreciable adverse effect on competition in India”. Trent Hypermarket currently operates just 16 retail stores and its total revenue, as per the annual report of Trent, during the financial year 2012-13 was only around Rs 785 crore, which is negligible as compared to the size of the overall retail market as well as the organized retail market in India.
According to CCI, as Tesco is not present in the retail market in India, there is no horizontal overlap between the business activities of the two firms in the local retail market.
While the central government has permitted FDI in supermarkets, some states have stalled the plans of foreign retailers to set up businesses by deciding against implementing this FDI policy.

Month: Current Affairs - May, 2014