The Competition Commission of India (CCI) on Tuesday gave approval to a proposal pertaining to intra-group reorganisation of the Motherson Group under the green channel route.
Green channel is an automatic approval system, whereby a combination is deemed to have been approved by the CCI upon receiving the filing of the notice for the combination by the parties concerned.
"Commission receives a notice under green channel from Motherson Sumi Systems, Samvardhana Motherson International & Sumitomo Wiring Systems relating to an intra-group reorganisation of the Motherson Group and is deemed approved," the regulator said in a tweet.
As part of the transaction, Motherson Sumi Systems Ltd's (MSSL) entire domestic wiring harness undertaking will be demerged into its newly incorporated wholly-owned subsidiary, Motherson Sumi Wiring India Ltd (MSWIL).
After the proposed demerger, MSSL will be left with the remaining business, its entire equity shareholding in MSWIL will stand cancelled and MSWIL's equity shares will be listed on the stock exchanges, according to a combination notice filed with the regulator.
After the demerger, Samvardhana Motherson International Ltd (SAMIL) will be amalgamated by absorption into MSSL, being the resultant company.
On proposed amalgamation, MSSL will be renamed as Samvardhana Motherson International Ltd (new SAMIL).
SAMIL's entire equity shareholding in MSSL will stand cancelled and the new SAMIL's equity shares issued to the shareholders of SAMIL will be listed on the stock exchanges.
Besides, SAMIL will be dissolved without winding up; and the new SAMIL will hold 33.43 per cent of the shareholding in MSWIL on the date of issuance, the notice added.
Currently, SAMIL is the single-largest shareholder in MSSL holding 33.43 per cent stake, and SWS holds 25.1 per cent shareholding in MSSL as of December 2020.