2023 CLD 475 COMPETITION COMMISSION OF PAKISTAN

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VS Ss. 11 & 31(1)(d)(i)---Competition (Merger Control) Regulation, 2016, Regln. 6---Pre-merger proceedings---Acquiring of shares---Pakistan Stock Exchange intended to acquire total shares of Central Depository Company (CDC) from two seller companies---Validity---Intention of acquisition is based on two circumstances i.e. where parties have signed a share purchase agreement, or have agreed in principle to proceed with the transaction---Provision of S. 11(2) of Competition Act, 2010, deals with a situation where an undertaking intends to acquire and provision of S. 11(3) of Competition Act, 2010, deals with the situation where the concerned undertaking agrees in principle or signs a non-binding letter of intent---Intent to acquire more shares in CDC as disclosed in Pakistan Stock Exchange's financial statement, did not attract pre-merger notification requirement, until willingness of the seller existed---Phase II review was not tenable to the extent to allow clearance for subject transaction and review remaining potentially acquisitions up to the extent of percentage so mentioned---Competition Commission was not empowered to treat such transaction in piecemeal and the same was contradictory to the stance of Pakistan Stock Exchange, where it had itself stated that such a transaction was not at all certain and would require a number of steps to be consumed before Pakistan Stock Exchange would be in a position to submit a pre-merger application and such was premature---Competition Commission could not assume or approve a transaction hypothetically---In regulatory scheme, timeline envisaged was not followed, therefore notwithstanding the regulatory intent, the Commission could not proceed on mere assumption in the absence of willing sellers---Competition Commission restricted Phase II review to the extent of Pakistan Stock Exchange's acquiring specified percentage of shareholdings in CDC---Current acquisition of specified percentage of share-holdings taking the total share-holding to a specific percentage in CDC did not raise any competition concern and would not lead to any material change in control in CDC or lessening of competition in the relevant market---Proposed transaction was authorized under S. 31(1)(d)(i) of Competition Act, 2010---In subject transaction, the matters that might fall outside the scope of Commission's purview remained subject to applicable laws---Application was disposed of accordingly. Head NotesCase Description

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