Reliance Industries Ltd. (RIL) proposes to enter into a joint venture agreement with RuYi of China. The Competition Commission of India (CCI) has given its nod for the deal.
Under the agreement, the Chinese company will hold 49 per cent share in the textile arm that will be incorporated by RIL as its wholly-owned subsidiary.
Reliance Industries will hand over its stakes to Shandong RuYi Science and Technology Group Company Ltd. Its newly-formed textile arm will now be partially owned by RuYi’s subsidiary, CSTT Co. Holdings Pte. Ltd., a Singapore-based company. Reliance’s textile business will now be handled by the subsidiary.
RuYi has a subsidiary in India known as Georgia Gullini Fashions Private Ltd. The licence for the ‘Georgia Gullini’ trademark has also been approved. On the other hand, the brand Vimal, that is the trademark of Reliance Industries, will also be licensed to the textile organization.
The CCI order of March 5 mentioned that the proposed deal will have a good effect on the competitiveness of the industry.
It also said that both the companies are in shirting and suiting business for men. They also deal in fabrics for trousers along with readymade trousers for men. In these sectors, the contribution of both RuYi and RIL is not very important.