Key Points
- Regulator finds no significant threat to competition in the urea market
- Transaction involved share purchases made through the Pakistan Stock Exchange
- Fatima Fertiliser later sold its entire stake in Agritech
ISLAMABAD: Pakistan’s competition watchdog has cleared the Fatima Fertiliser Company acquisition of shares in fertiliser producer Agritech, concluding that the transaction did not significantly weaken competition in the country’s fertiliser markets.
The Competition Commission of Pakistan (CCP) reviewed two share purchases Fatima Fertiliser made in Agritech through the Pakistan Stock Exchange, one in 2023 and another in 2024.
The commission assessed the transactions together as part of its periodic review.
The regulator examined the acquisition impact on Pakistan’s urea and Single Super Phosphate (SSP) fertiliser markets. Fatima Fertiliser and Agritech both operate in the urea market, creating direct competitive overlap between the two companies.
The CCP found that the transaction increased the combined market share of the companies in the urea segment but concluded that the increase was not sufficient to create or strengthen a dominant market position.
It also found no significant new barriers to entry or other factors that would materially restrict competition in the market.
According to the Commission, the two companies did not have a competitive overlap in the SSP segment because Fatima Fertiliser had no market share therein. Therefore, the transaction did not alter the competitive structure of the SSP market, it added.
In another development, Fatima Fertiliser subsequently sold its entire shareholding in Agritech. The company informed the regulator that it no longer intended to pursue control of Agritech and had no shares in the company when the CCP issued its determination.
Agritech is a Pakistan-based fertiliser producer listed on the Pakistan Stock Exchange.
It manufactures and sells urea and granular SSP fertiliser, while Fatima Fertiliser is one of Pakistan’s major fertiliser manufacturers and also produces and markets other agricultural inputs.
The CCP authorised the transaction under Pakistan’s Competition Act after completing its Phase-I review, determining that it did not substantially lessen competition or create or strengthen a dominant position in the relevant markets.
Pakistan’s fertiliser industry is strategically important to the country’s agriculture sector, with urea among the key inputs used by farmers.
Regulatory scrutiny of acquisitions and ownership changes is aimed at ensuring that consolidation does not restrict competition or adversely affect market conditions.
The decision provides regulatory clearance for the share acquisitions despite the subsequent disposal of Fatima Fertiliser’s entire holding in Agritech.
