Coforge to Acquire Majority Stake in Cigniti Technologies with CCI Approval

The Competition Commission of India (CCI) has approved IT firm Coforge's plan to acquire a majority stake in Cigniti Technologies. Baring Private Equity Asia-promoted Coforge, listed on BSE and NSE, is an IT and IT-enabled services (ITES) provider. The acquisition involves at least 50.21% and up to 54% shareholding in Cigniti through share purchase agreements and a mandatory open offer, as per SEBI regulations.

Representative image

Approval for Mitsui & Co's Investment

In another development, CCI has also granted approval to Tokyo-based Mitsui & Co to acquire a stake in Sneha Farms Pvt Ltd. Mitsui & Co operates in various sectors, including mineral resources, infrastructure projects, chemicals, food & retail management, and IT & communication. The transaction involves Mitsui acquiring equity shares of Sneha Farms through a combination of primary subscription and secondary purchase.

Cigniti Technologies and its affiliates provide IT and ITES services in India. The CCI confirmed the approval of Coforge's acquisition of a majority shareholding in Cigniti Technologies Ltd through a post on X (formerly Twitter). In May, Coforge announced that its board had approved the acquisition of a 54% stake in Cigniti Technologies.

Details of the Proposed Transactions

Coforge has agreed to enter into a share purchase agreement with Cigniti's promoters and select public shareholders. This agreement is subject to the execution of definitive agreements and the completion of certain identified conditions precedent. The proposed transaction aligns with SEBI's Substantial Acquisition of Shares and Takeovers regulations.

Sneha Farms engages in activities ranging from poultry breeding to product distribution. This includes maintaining hatcheries, processing frozen and chilled chicken, and producing ready-to-cook poultry products. In March, Mitsui & Co announced its decision to invest in Sneha Farms, one of India's leading broiler producers. Following the investment, Sneha Farms will become an associated company of Mitsui.

Deals exceeding a certain threshold require regulatory approval to ensure fair competition and prevent unfair business practices. The CCI plays a crucial role in promoting fair competition in the marketplace by scrutinising such transactions.

The approval from CCI marks significant progress for both Coforge and Mitsui & Co in their respective acquisitions. These transactions are expected to enhance their market presence and operational capabilities within their industries.