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Merger and Acquisition Cases
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| 1. Introduction |
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| The Merger & Acquisition Department operates under the supervision of Member (Merger & Acquisition). Its functions and responsibilities include detection of Merger and acquisition cases from newspapers, websites of all stock exchanges, SECP etc and overview of any merger/acquisition of shares or assets /joint venture etc. under Section 11 of the Competition Act, 2010 (the Act). It also operates “Acquisitions & Mergers Facilitation Office” (AMFO), the purpose of which is to facilitate the undertakings which are contemplating merger or acquisition (as defined in the Competition Act 2010) and want to get informal and non binding view of the Commission. The Merger & Acquisition Department has dealt with a large number of cases of mergers, acquisitions and joint venture agreements (Link button). The procedure adopted by this Department for examining the application and issuance of NOC is very transparent and dealt with expeditiously by experts working in this Department. In spite of a time frame of 30 days for the first phase review, the cases are usually finalized and NOC issued within few days except the cases where some additional information is required. During processing of cases utmost effort is made that applicant undertakings are not bothered to visit Commission’s office. The additional information required is collected telephonically instead of making correspondence, except in rare cases. |
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| 2. Law |
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| Section 11(1) of the Act envisages a prohibition and defines the offence, i.e. any merger which substantially lessens competition by creating or strengthening dominant position is barred under law. Section 11(2) of the Act, a non obsante mandatory provision requires the undertakings intending to merge or making transactions regarding acquisition of assets/shares which meet the thresholds provided in Regulation 4 of the Competition (Merger Control) Regulations, 2007 to submit application for clearance by the Commission. |
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| 3. Procedure |
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| The undertakings meeting the thresholds are required to submit application in the prescribed form available in the Schedule to the Competition (Merger Control) Regulations, 2007 (Link button) along with the fee prescribed in Regulation 5(6) of the Regulations. On receipt of the pre-merger application, complete in all respects, the Commission examines and scrutinizes it in the light of the provisions of the Act as well as the Regulations. |
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| Phase I Review (30 days). |
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| The case is examined in detail and, if observed, that there is no lessening of competition by creating or strengthening a dominant position in the relevant market, a No Objection is granted to the applicant undertaking. If, otherwise, the case is taken into 2nd phase review for further examination in depth. The Commission is supposed to finalize the Phase I review within 30 days, but usually it examines and finalizes the merger/acquisition case expeditiously within 2-3 days, if there is no discrepancy or requirement of further documents/details for review. Failure to make a determination within the prescribed period of thirty days of the first phase review shall mean that the Commission has no objection to the intended merger. |
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| Phase II Review (90 days). |
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The Commission after examining the case in Phase-I Review, if determines that the intended merger lessens competition by creating or strengthening a dominant position, it proceeds, further to examine the case in detail after acquiring further details/documents. After the examination the Commission may;
• prohibit consummation of the intended merger; or
• approve the intended merger subject to conditions; or
• approve the intended merger on the condition that the concerned undertaking enter into contracts specified by the Commission; or
• give clearance and authorize the intended merger if the intended merger under review does not lessen competition by creating or strengthening dominant position. For the purpose of second phase review, the Commission calls for further detailed information to enable it to make the necessary determination, within ninety days of the receipt of requisite information. The Commission reviews the merger to assess whether it substantially lessens competition by creating or strengthening a dominant position in the relevant market and pass its order under section 31 of the Act. Failure to render a decision within ninety days shall be deemed to mean that the Commission has no objection to the intended merger.
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| Consummation of merger without complying with the provisions of sub-section (1) to sub-section (4) would attract the provision of section 38 for imposition of penalty. |
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| International Affairs |
The Department is actively involved in various working groups of the International Competition Network (ICN), specifically in the Working Groups on Cartels and Agency Effectiveness. The department also contributes to the workings of the Organisation for Economic Co-operation and Development (OECD) and United Nations Conference on Trade and Development (UNCTAD). |
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Comments and queries may be sent to:
Merger & Acquisition and International Affairs Department,
Competition Commission of Pakistan
7th Floor South , ISE Towers 55-B,
Jinnah Avenue, Islamabad, Pakistan
Dr. Joseph Wilson (jwilson@cc.gov.pk)
The Office of International Affairs (oia@cc.gov.pk)
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Departments