The Competition Commission of Pakistan (CCP) has not received any application/intimation of pre-merger clearance from the PTCL Group for acquiring Telenor Pakistan’s operations and management.
Top CCP officials told ProPakistani that the Competition Act 2010 (the Act) and the Competition (Merger Control) Regulations lay down that pre-merger clearances have to be filed as soon as an agreement in principle for the merger takes place, or a non-binding letter of intent to proceed with the merger is signed.
Official sources confirmed that PTCL or Telenor will approach CCP in due course of time, as the process for due diligence is yet to start, hinting that PTCL / Telenor talks are at a very early stage at this point in time and may take longer than expected to conclude.
“Under the CCP law, either the PTCL Group or Telenor Pakistan is required to file a pre-merger application with the CCP”, officials said. The parties to the merger are equally responsible for the filing, although in practice the parties usually decide between themselves who should file the application.
PTCL Group has shown its interest in acquiring Telenor Pakistan’s operations and management in totality, well-placed sources have confirmed. PTCL has notified the Pakistan Stock Exchange (PSX) of its intent of acquiring a telecom company, but it didn’t specify the name of the operator.
According to the CCP Act, in the case of an acquisition of shares or assets, the acquiring party must be the notifying party to the merger application in accordance with section 11(2) of the Act. The party filing the application is supposed to issue a notice of filing to all other parties to the merger, with a copy of the such notice to the CCP, stating that the application will be or has been made.
Filing fees are required and vary with the turnover of parties to the merger or the value of assets under management (the latter in the case of AMCs). The minimum filing fee is Rs. 300,000 and depending upon the size of the parties to the transaction can go up to Rs. 2.25 million.
Section 11(12) of the Competition Act sets out that sanctions can be imposed where parties have consummated a merger without complying with the pre-merger clearance procedure. Sanctions include the Competition Commission of Pakistan (CCP)’s power to undo a merger or prohibit it altogether. So far, no application has been received in the CCP from the PTCL Group for acquiring Telenor Pakistan.