CCP greenlights Fatima Fertilizer’s acquisition of Agritech shares

The Competition Commission of Pakistan (CCP) has completed its Phase-I competition review and authorised a transaction involving the acquisition of shares in Agritech Limited by Fatima Fertilizer Company Limited.

The transaction involved the acquisition of Agritech shares through the Pakistan Stock Exchange in two stages—an initial acquisition in 2023 followed by an additional acquisition in 2024, read a statement on Tuesday. For the purpose of its review, CCP assessed the aggregate shareholding acquired through both transactions.

Fatima Fertilizer Company Limited is a publicly listed company engaged in the manufacture, production, purchase, sale, import and export of fertilisers and chemicals. Agritech Limited, also a publicly listed company, is engaged in the production and sale of urea and granulated Single Super Phosphate (SSP) fertiliser.

Given the importance of fertiliser as a key agricultural input, CCP examined the potential effects of the transaction on market structure, concentration and competition in Pakistan’s fertiliser sector.

CCP identified urea and SSP as the relevant product markets, with Pakistan as the relevant geographic market. It assessed the market positions of the parties and their competitors, as well as the likely effect of the transaction on competition.

The assessment identified a horizontal overlap between Fatima Fertilizer and Agritech in the urea market, resulting in an increase in their combined market share. In the SSP market, Fatima Fertilizer had no market share; consequently, Agritech’s position in that market remained unchanged.

During the review, Fatima Fertilizer informed the Commission that it had divested its entire shareholding in Agritech and no longer intended to pursue control of the company. Consequently, Fatima Fertilizer held no shareholding in Agritech at the time of the Commission’s determination.

In light of the competition assessment and this subsequent development, CCP concluded that the transaction did not pose a risk of substantially lessening competition in the relevant markets. The transaction did not create entry barriers, significantly enhance the market power of the parties, or create or strengthen a dominant position within the meaning of the Competition Act, 2010.

Accordingly, the Commission authorised the transaction under Section 31(1)(d)(i) of the Competition Act, 2010.

CCP said that effective merger control is particularly important in sectors such as fertilisers, where competitive market conditions have wider implications for agricultural production, farmers and the national economy.