CCP allows PAFL’s acquisition of a plant of Pakistan Oxygen Ltd

ISLAMABAD: The Competition Commission of Pakistan (CCP) has approved Pak Arab Fertilisers Limited’s acquisition of the liquid carbon dioxide (LCO2) plant of Pakistan Oxygen Limited, paving the way for Fatima Group’s entry into a segment linked to industrial and food-grade carbon dioxide production.

According to the documents available with Business Recorder, the approval was granted following a Phase-I merger review under the Competition Act, 2010. The transaction involves the acquisition of Pakistan Oxygen’s LCO2 plant by Pak Arab Fertilisers Limited, a wholly owned subsidiary of Fatima Fertiliser Company Limited.

The development comes at a time when Pakistan Oxygen Limited has reported its strongest-ever financial performance. The company posted a record profit after tax of Rs1.7 billion for calendar year 2025, up 134 percent from Rs712 million a year earlier, while earnings per share rose to Rs19.16 from Rs8.17. Net sales increased 15 percent to Rs13 billion, whereas gross profit surged 71 percent to Rs5.24 billion.

Market analysts attributed the sharp improvement in profitability to enhanced operational efficiencies and disciplined pricing.

According to an analyst briefing note issued by AKD Securities, the company’s new 270-tonnes-per-day air separation unit at Port Qasim operated more efficiently than originally designed, significantly improving margins.

The merger application was submitted to the CCP under Section 11 of the Competition Act, 2010 pursuant to an Asset Purchase Agreement signed on February 4, 2026. Following its assessment, the Commission authorised the transaction under Section 31 of the Act.

Pak Arab Fertilisers is engaged in the manufacturing, production, import, export and sale of fertilisers and chemicals, while Pakistan Oxygen is one of the country’s oldest industrial gas producers, supplying industrial and medical gases, welding electrodes and medical equipment.

The Commission examined the transaction’s likely impact on market concentration and competition in the production and sale of liquid carbon dioxide in Pakistan. According to the order, the transaction constitutes a horizontal merger because both the acquiring group and the target are active in the same relevant market.

However, the CCP concluded that the resulting increase in market share would be limited and would not materially alter competitive conditions. The regulator further observed that the acquisition would neither create barriers to entry nor significantly enhance the market power of the merger parties.

The Commission found no basis to conclude that the transaction would substantially lessen competition, create or strengthen a dominant position, or distort prevailing market conditions. Consequently, it approved the acquisition under Section 31 (1) (d) (i) of the Competition Act.

The latest approval reflects the CCP’s ongoing role in facilitating corporate restructuring, investment and asset transactions while ensuring that market competition remains intact.

Copyright Business Recorder, 2026