Hindustan Unilever Limited

Document text

Page 1 of 4 COMPETITION COMMISSION OF INDIA Combination Registration No. C-2025/01/1238 17th March 2025 Notice under Section 6(2) of the Competition Act, 2002 given by Hindustan Unilever Limited CORAM: Ms. Ravneet Kaur Chairperson Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 31(1) of the Competition Act, 2002 1. On 28th January 2025, the Competition Commission of India (Commission) received a notice (Notice), under Section 6(2) of the Competition Act, 2002 (Act), given by Hindustan Unilever Limited (HUL/Acquirer). 2. The Notice relates to proposed acquisition of 100% of the share capital and control of Uprising Science Private Limited (Uprising Science/Target) by the Acquirer (Proposed Combination) in accordance with the Share Purchase and Subscription Agreement dated 22nd January 2025 executed, inter alia, between HUL and Uprising Science (SPSA). The Proposed Combination will be given effect to through the following steps: (i) Step 1 – Secondary Acquisition: The Acquirer proposes to acquire 89% of the total share capital of the Target (on a fully diluted basis) from the founders and other shareholders of the Target. (ii) Step 2 – Primary Subscription: The Acquirer proposes to subscribe to equity shares issued by the Target equalling 1.5% of its total share capital (on a fully diluted basis). Combination Registration No. C-2025/01/1238 Page 2 of 4 (iii) Step 3 – Acquisition of the Target’s founders’ remaining shareholding: The Acquirer proposes to acquire 9.5% of the total share capital of the Target (on a fully diluted basis) from the Target’s founders as per the framework agreed in the SPSA. 3. In accordance with Regulation 14(2) of the Combination Regulations, vide letter dated 10th February 2025, certain information and clarifications were sought from the Acquirer. The Acquirer submitted its response on 24th February 2025 after seeking extension of time. Further, the Acquirer made certain additional submissions on 11th March 2025. 4. The Acquirer belongs to the ‘Unilever group’ with its ultimate controlling person being Unilever plc. In India, the Acquirer is involved in the business of manufacture and sale of: (a) home care products; (b) beauty & personal care products (BPC); (c) food products and refreshments. The home care business includes fabric wash and household care products; beauty and personal care includes personal wash, skin care, hair care, oral care, deodorants, colour cosmetics, etc.; food products include noodles, soup, jam, ketchup and sauces, and refreshments include tea, coffee, nutritional beverages, ice cream and frozen desserts etc. The Acquirer has over 50+ brands spanning 16 distinct categories including Lux, Surf Excel, Glow & Lovely, Lakme, Knorr, Kwality Wall’s, Brooke Bond, BRU among others. 5. The Target is engaged in the manufacture and sale of beauty and personal care products such as skin care & body care products, baby care products and hair care products. 6. Considering the activities of the Acquirer and its affiliates and the Target in India, the Commission identified primary area of assessment as the horizontal overlaps in the segment of manufacture and sale of BPC at the broader level in the sub-segments of manufacture and sale of skincare products and manufacture and sale of haircare products at the narrower level. The Commission noted the submissions of HUL that the Target is a niche direct-to- consumers (D2C) brand that is largely focused on targeted skincare and haircare products and that from a consumer perspective, the Target offers a range of skincare products that address common concerns like acne, pigmentation, aging, and hydration. As per the submissions of HUL, the portfolio of Target consists of actives-led and science-based Combination Registration No. C-2025/01/1238 Page 3 of 4 products, strategically designed to target specific skin issues, which encourages repeat purchases as customers build their personalized skincare regimens. Considering the same, the Commission assessed the impact of the Proposed Combination in the premium actives- led BPC products segment (Premium Actives-led Segment) as well in addition to the aforesaid broader BPC segment and narrower segments of skincare and haircare products. However, the Commission decides that the question of exact delineation of relevant market can be left open as irrespective of the way market(s) is/are delineated, the Proposed Combination is not likely to cause appreciable adverse effect on competition (AAEC) in India for the reasons given in subsequent paragraphs. 7. The Commission observed that while HUL is the biggest player in the BPC segment and both the sub-segments of skin care and hair care products with respective market shares in the range of [15-20] percent, [30-35] percent and [15-20] percent, the Target has an insignificant presence in the aforesaid segments and sub-segments as reflected in the market share of less than 1 percent in BPC segment and haircare sub-segment and less than 2 percent in skin care sub-segment. In the Premium Actives-led Segment, the share of HUL ranges from [5-10] percent and that of Target ranges from [0-5] percent with combined share estimated to be in the range of [10-15] percent. While the Proposed Combination will have the effect of creating the biggest player, the overall combined market share is limited and the segment appears to be competitive with presence of other players such as Galderma and Loreal (each having market share in the range of [5-10] percent) and Honasa, Elca and Forest Essentials (each having share of [0-5] percent). Considering the aforesaid, the Proposed Combination is not likely to cause significant change in competition dynamics for any of the aforesaid business segments/sub-segments. 8. Considering the material on record including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have AAEC in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act. Combination Registration No. C-2025/01/1238 Page 4 of 4 9. This order shall stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect. 10. The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act. 11. The Secretary is directed to communicate to the Acquirer accordingly.