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CCI approves Tata's settlement deal with DoCoMo
The Competition Commission of India (CCI) has approved the deal for Tata Sons to buy out NTT DoCoMo's 21.63% stake in Tata Teleservices, bringing DoCoMo one step closer to its longstanding goal of exiting the Indian market.
Tata Sons and four of its group companies including Tata Communications jointly submitted an application to the CCI to buy out the stake to make good on its $1.18 billion settlement agreement with DoCoMo.
With the regulator now approving the purchase, the long-standing impasse preventing the sale is closer to being lifted.
The dispute dates back to 2014, when DoCoMo decided to exercise its option to require the Tata Group to buy back DoCoMo's stake in Tata Teleservices, purchased when the companies entered the Tata DoCoMo joint venture. DoCoMo had decided to exit the Indian market after years of underperformance at the Indian joint venture.
But the Reserve Bank of India had blocked the transaction on the grounds that it violated Indian regulations restricting the sale of shares at a price higher than market value. DoCoMo responded by entering international arbitration in London, and the court awarded $1.17 billion in damages in a positive verdict.
But the RBI retained its objection and DoCoMo brought the case before the Delhi High Court. The court recently ruled in DoCoMo's favor, and now the CCI has endorsed the transaction. The deal way still require approval from India's tax department.