New Delhi, Sep 4 (PTI) Fair trade regulator CCI on Friday said it has approved the proposed acquisition of Metso Oyj's minerals business by Outotec Oyj, subject to certain modifications to address likely anti-competitive effects.

Both are Finnish companies and have presence in India.

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Under the proposed transaction, all assets, rights, debts, and liabilities of Metso that relate to its minerals business will be acquired by Outotec.

"The Commission found that the proposed combination is an integration of two strong and close competitors in the market for Iron Ore Pelletisation (IOP) Equipment Island in India," the regulator said in a release.

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The watchdog noted that the proposed combination appears to limit the number of suppliers available to customer in this market in India, reduce the intensity of innovation in the technology for pelletising technology and equipment and result in creation of a strong integrated player.

The combination seems to perpetuate the substantial market position of the entities in the market and reduces or eliminates the competitive pressure that would prevail in the absence of proposed combination, it added.

Among others, the CCI said it also appears to increase the cost of the entrants and rivals to compete and increase their presence in the market.

"Thus, the Commission was of the view that the proposed combination would reduce competition and confer the combined entity, the ability to increase price etc," the release said.

In order to address the competition concerns, the entities proposed voluntary remedies/ modifications.

The regulator also noted that the voluntary remedies eliminate the overlap between them in the IOP segment in India and would effectively transfer Metso Minerals' Indian Straight Grate IOP capital equipment business to a suitable buyer, thereby preserving the competition.

"The modification essentially involves transferring a right to fully use and exploit the SG IOP capital equipment drawings, including the related registered IP by way of an exclusive and irrevocable license, subject to a lump sum upfront payment and no ongoing royalties.

"VRP (Voluntary Remedies Proposal) will allow the emergence of a new competitor, thus resolving any concerns whatsoever in relation to this segment," the release said.

The latest order has been passed after a detailed inquiry by the regulator on a combination notice filed by Metso and Outotec in March.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)