CCP approves UAE firm’s acquisition of Masood Textile Mills shares

The Competition Commission of Pakistan (CCP) has approved the acquisition of a shareholding in Masood Textile Mills Limited by UAE-based Velora Global Ventures-F.Z.C. from two Chinese companies.

The approval was granted following a Phase-I competition assessment under the Competition Act, 2010, the CCP said in a statement issued on Thursday.

Under the transaction, Velora Global Ventures will acquire shares in Masood Textile Mills from Shanghai Challenge Textile Company Limited and Zhejiang Xinao Industry Company Limited under a Share Purchase Agreement.

Velora Global Ventures, incorporated with the Ajman Free Zone Authority in the United Arab Emirates, is engaged in wholesale trading of textiles and clothing as well as commercial brokerage activities outside Pakistan.

Its associated companies, Gulf Textile Sourcing F.Z.C. and Zara Textile Trading F.Z.C., are involved in international textile sourcing and trading, customer development and order coordination.

Masood Textile Mills, a publicly listed Pakistani company, manufactures and sells cotton and synthetic fibre yarn, knitted and dyed fabrics, and garments.

During its Phase-I review, the CCP examined whether the transaction could substantially lessen competition or create or strengthen a dominant position in the relevant markets.

The commission found that Velora Global Ventures had no pre-merger market presence in Pakistan. As a result, the acquisition was not expected to cause any material change in Masood Textile Mills’ output, domestic sales or market position.

The CCP also assessed a potential vertical relationship between the acquirer’s international textile trading activities and Masood Textile Mills’ manufacturing operations.

It concluded that the nature and scope of the respective businesses did not raise competition concerns and that the transaction would neither create entry barriers nor significantly enhance the acquirer’s market power.

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

The commission said timely and transparent merger and acquisition reviews help facilitate investment and economic activity while ensuring that transactions do not harm competition.

It added that an effective merger-control regime provides regulatory certainty, supports foreign direct investment and business expansion, and safeguards competitive markets and consumer interests in Pakistan.