Market Shocked As Japanese Giant Exits Pakistan After Selling Engro Polymer Stake

The Competition Commission of Pakistan (CCP) has approved the proposed acquisition of shareholding in Engro Polymer and Chemicals Limited by Liberty Daharki Power Limited from Mitsubishi Corporation, following a Phase I review conducted under Section 11 of the Competition Act, 2010.

The transaction involves the acquisition of shares in Engro Polymers and Chemicals Limited pursuant to a Share Purchase Agreement executed among Mitsubishi Corporation, Liberty Daharki Power Limited, and Seagreen Enterprises (Private) Limited.

Engro Polymers and Chemicals Limited, a subsidiary of Engro Corporation Limited, is a leading manufacturer of Polyvinyl Chloride (PVC), caustic soda, hydrogen peroxide, and other related chemicals in Pakistan. The acquiring entity operates in the power generation sector, owning and operating a natural gas fired power plant in Daharki, Sindh, for the generation and sale of electricity under a power purchase arrangement.

The Commission assessed the transaction to determine its potential impact on competition in the relevant markets, defined as the manufacturing and sale of PVC, caustic soda, and hydrogen peroxide in Pakistan.

The assessment found that the transaction does not involve any horizontal overlap between the parties and will not result in any change in the market share of the target post acquisition.

The CCP concluded that the transaction is unlikely to result in any substantial lessening of competition. The analysis further indicated that the relevant markets remain fragmented, with no significant risk of anti competitive conduct, including collusion or foreclosure.

Accordingly, the Commission determined that the proposed acquisition does not create or strengthen a dominant position in the relevant market and has authorized the transaction under Section 31(1)(d)(i) of the Competition Act, 2010.