2022 CLD 266 COMPETITION COMMISSION OF PAKISTAN

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VS S. 11--- Merger, approval of--- Scope--- Acquirer submitted application to the Competition Commission regarding its intention to acquire the shareholding of Target Company and sought approval of the merger---Concerns related to the transaction broadly were that the Acquirer had numerous subsidiaries/associated companies in the downstream packaging market i.e. the related market including one that used Biaxially Oriented Polypropylene (BOPP) films in its packaging material, therefore, the increase in shareholding could increase the market power of the Acquirer and put it in a position where it could foreclose the downstream market and affect competition thereon through anti-competitive practices such as refusal to supply, tie-ins/bundling, predatory pricing, etc.---Acquirer could also, post transaction, impose unilateral effects, i.e., when the merged group was able to profitably reduce the value for money, choice or innovation through its own acts without the need for a co-operative response from the competitors---Transaction raised the likelihood that, following the merger, merging parties and their competitors would be able to possible coordinate their behaviour in an anti-competitive manner, as there were only three big players in the relevant market, potentially driving smaller firms out of the industry due to a highly concentrated market---Held; Commission upon detailed review/perusal of the material, documents and facts on record found merit in the submissions of the Acquirer that the transaction would not adversely impact the competition in the relevant markets because (a) Acquirer was originally and always in charge of the management of the affairs of the Target Company; (b) its associated companies in the packaging business related to inter alia paper and paperboard products, cartons and tissue products and did not use BOPP or Cast Polypropylene (CPP) films as raw materials and such films did not form part of the supply chain for such products and (c) no history of collusion or any other anti-competitive practices was found in the relevant market---Transaction was not likely to substantially lessen competition in the relevant markets, it neither created nor strengthened a dominant position as the Acquirer's position of control would remained in effect---Proposed transaction was authorized.

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