Citi Pharma’s acquisition of Pakheim clears scrutiny in five drug markets

ISLAMABAD: Citi Pharma Limited’s acquisition of Pakheim International Pharma (Pvt) Limited has cleared scrutiny in five medicine markets, with the Competition Commission of Pakistan (CCP) finding limited overlaps and no substantial threat to competition.

CCP’s Phase-I order authorises the purchase of Pakheim’s entire shareholding under a share purchase agreement signed on May 6, 2026. Pakheim would become a wholly owned subsidiary of Citi Pharma upon completion.

The detailed order identifies four individual sellers: Mossadaq Farhan, Arif Ahmed Khawaja, Muhammad Mustafizur Rehman and Muhammad Ijaz Nasir. Incorporated on February 26, 2007, Pakheim manufactures finished pharmaceutical products.

CCP assessed antibiotic, anti-ulcer, painkiller, anti-allergic and anti-diabetic formulations across Pakistan. Overlaps in antibiotics, painkillers and anti-diabetics were insignificant because Pakheim’s market presence was negligible. Citi Pharma reported no anti-ulcer or anti-allergic sales in FY2025.

The CCP also examined a potential vertical link between Citi Pharma’s production of active pharmaceutical ingredients (APIs) and Pakheim’s formulations business. However, Pakheim had bought no APIs from Citi Pharma during the preceding two years. CCP found Pakheim’s negligible market presence meant the potential supply relationship raised no competition concern.

The regulator found no new entry barriers or restrictions on competitors’ ability to compete, concluding that the acquisition would neither substantially lessen competition nor create or strengthen a dominant position across the relevant markets.

Citi Pharma’s 2026 annual report describes higher margins in finished formulations than in APIs, where larger customers obtain longer credit terms. The company is seeking to develop its own brands and distribution network.

Its stated ambition to lift Pakheim-related revenue from approximately Rs500 million to Rs5 billion within five years implies compound annual growth of 58.5 percent, calculated from the company’s stated starting point and objective. The starting revenue represents about 3.6 percent of Citi Pharma’s FY2026 standalone net sales.

In the year ended June 30, 2026, standalone sales rose 6.5 percent to Rs 14.00 billion from Rs 13.15 billion, while profit after tax fell 12.3 percent to Rs 782.60 million from Rs 892.04 million. Earnings per share declined to Rs 3.43 from Rs 3.90.

Copyright Business Recorder, 2026