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CCP has cleared Fatima Fertilizer’s acquisition of Agritech shares after finding no substantial competition concerns following its Phase-I review.
The Competition Commission of Pakistan (CCP) has authorised a transaction involving Fatima Fertilizer Company Limited and Agritech Limited after completing its Phase-I review of the deal’s potential impact on competition.
The transaction covered share purchases made by Fatima Fertilizer through the Pakistan Stock Exchange in 2023 and 2024. CCP considered the holdings from both acquisitions together as part of its assessment.
Both companies operate in the fertiliser industry, although their product portfolios differ. Fatima Fertilizer manufactures and trades fertilisers and chemicals, while Agritech produces urea and granulated Single Super Phosphate (SSP) fertiliser.
CCP examined the structure of Pakistan’s fertiliser sector, defining urea and SSP as separate relevant product markets and Pakistan as the geographic market. The Commission assessed the companies’ market positions, those of their competitors and the possible effect of the transaction on competition.
The review found an overlap between Fatima Fertilizer and Agritech in the urea market, where the companies’ combined share increased as a result of the transaction. No such overlap existed in SSP because Fatima Fertilizer had no share in that market, leaving Agritech’s position unchanged.
A subsequent development also affected the Commission’s assessment. During the review process, Fatima Fertilizer informed CCP that it had sold its complete holding in Agritech and had abandoned plans to obtain control of the company. It consequently had no ownership stake in Agritech when CCP issued its determination.
Based on its assessment and the change in ownership, CCP found that the transaction would not substantially weaken competition in the relevant markets. The Commission determined that the deal did not introduce significant barriers to new entrants, materially strengthen the parties’ market power or result in the creation or reinforcement of a dominant position under the Competition Act, 2010.
CCP therefore approved the transaction under Section 31(1)(d)(i) of the Competition Act, 2010.
The Commission also emphasised the importance of merger oversight in the fertiliser industry, given the sector’s broader significance for agricultural output, farmers and Pakistan’s economy.
