Julius Baer-DSP Merrill Lynch deal gets CCI green signal

March 22, 2015 01:30 pm | Updated 01:30 pm IST - New Delhi

The Competition Commission has cleared Swiss banking group Julius Baer’s proposed acquisition of DSP Merrill Lynch’s wealth management and related businesses in India.

Giving green signal to the multi-layered deal, the fair trade watchdog said the deal “is not likely to have an appreciable adverse effect on competition” in the country.

The deal relates to the acquisition of wealth management business as well as related lending businesses and trust services of DSP Merrill Lynch Ltd (DSPML) in India. DSPML is controlled by Bank of America.

“It is observed that DSPML and Julius Baer are not engaged in providing similar or identical or substitutable services in the onshore Indian market either directly or indirectly,” the regulator said in its order dated March 5.

Julius Baer has no presence in the onshore Indian market and there are also no existing vertical relationship between the two entities in the country.

The Commission also noted that DSPML’s market share in terms of the wealth management business in India, is insignificant compared to other major market players.

The deal, which involves a series of “inter-connected and inter-dependent steps”, would see Julius Baer acquiring all shares of Merrill Lynch Wealth Advisors Pvt Ltd (MLWA) -- a wholly-owned subsidiary of DSP Merrill Lynch.

Pursuant to this, DSPML’s wealth management business as well as DSP Merrill Lynch Trust Services Ltd would be transferred to MLWA.

Then, DSP Merrill Lynch Capital’s wealth management lending business would be transferred to Banc of America Securities (India) Pvt Ltd (BASIL), which would be then be transferred to MLWA.

MLWA has been set up specifically for the deal. A local purchase agreement with regard to the transaction was inked in January.

Bank Julius Baer & Co Ltd, part of the Swiss group, is a registered FII and has investments in certain Indian companies that have no overlap with the wealth management business of DSPML in the country, the Commission said.

DSPML is registered as a stock broker, merchant banker, underwriter, depository participant, investment advisor and portfolio manager. DSPML Capital and BASIL -- an indirect wholly-owned subsidiary of BAC -- are non-banking financial companies.

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