Amarchand Mangaldas gets CCI clearance on Rs. 2,058 crore Jet-Etihad Deal

The long-pending Jet-Etihad deal has finally got the approval of fair trade regulator, CCI on Tuesday. In a majority decision, the CCI has cleared the proposed acquisition of 24 per cent stake in the Indian carrier Jet Airways by Abu Dhabi-based airline for Rs 2,058 crore.

The Amarchand Mangaldas Competition Law team advised both Jet Airways and Etihad in receiving the approval. The proposed acquisition is the first such investment in an existing national airline carrier since the government relaxed FDI norms allowing foreign airline companies to hold up to 49 per cent stake in Indian companies.

The Amarchand team was led by Mumbai Competition Head Nisha Kaur Uberoi along with Senior Associate Abir Roy and Associates Piya Sawhney and Shweta Vasani.

The anti-trust regulator, in its order, said that the proposed combination is not likely to have appreciable adverse effect on competition in India.

The CCI in its majority order passed by CCI Chairman Ashok Chawla and four members said the approval is granted on the basis of ‘underlying competition assessment’ based on information provided by the parties in their notice, which has been modified and supplemented from time to time.

However the CCI in its order has clearly said that, “This approval should not be construed as immunity in any manner from subsequent proceedings before the Commission for violations of other provisions of the (Competition) Act. It is incumbent upon the parties to ensure that this ex-ante approval does not lead to ex-post violation of the provisions of the Act”.

The CCI said that the approval may be revoked if information provided by Jet and Etihad is found to be incorrect at any time.

For the first time, there was also dissenting order, passed by CCI member Anurag Goel. The dissenting order states that the proposed combination is likely to cause an adverse effect on competition within the market of international air passenger transportation from and to India.

Now with the CCI approval, all decks have been cleared for the acquisition including the FIPB approval and Cabinet clearance. The acquisition itself is now expected to be closed in the next two weeks.

On the corporate side, Amarchand Mangaldas acted as Indian legal counsel for Etihad while DLA Piper acted as International legal counsel. Gagrats and Economic Laws Practice along with Senior Advocate Harish Salve acted for Jet Airways.