The Competition Commission of Pakistan has officially granted its approval for a significant ownership transition within the nation’s chemical sector. Following an extensive Phase-I review conducted under the Competition Act of 2010, the regulator cleared the acquisition of a strategic shareholding in Engro Polymers and Chemicals Limited by Liberty Daharki Power Limited. This stake was previously held by the Mitsubishi Corporation, marking a notable exit for the Japanese conglomerate from this specific venture and a strategic expansion for the local power producer.
This corporate transaction was executed through a formal share purchase agreement involving Mitsubishi Corporation, Liberty Daharki Power Limited, and Seagreen Enterprises Private Limited. The deal centers on Engro Polymers, which holds a prominent position in the industrial landscape as a subsidiary of Engro Corporation. The company is a vital manufacturer of polyvinyl chloride, caustic soda, and hydrogen peroxide, among various other chemical products that serve as raw materials for numerous downstream industries in Pakistan.
The acquirer, Liberty Daharki Power Limited, currently operates a natural gas-fired power generation facility located in Sindh. Under its existing power purchase arrangements, the firm is a key contributor to the national energy grid. By moving into the chemical manufacturing space, Liberty Daharki is diversifying its industrial portfolio. During the regulatory review process, the CCP meticulously evaluated how this change in ownership might influence the competitive dynamics of the markets for PVC, caustic soda, and hydrogen peroxide manufacturing and sales across the country.
In its final assessment, the regulator concluded that the transaction does not present any significant risks to market fairness. The commission noted that there is no horizontal overlap between the businesses of Liberty Daharki Power and Engro Polymers, meaning the two companies do not compete in the same primary product markets. Consequently, the market position and share of Engro Polymers will remain unchanged following the completion of the acquisition. The CCP emphasized that the relevant chemical markets in Pakistan remain sufficiently fragmented, allowing for healthy competition to persist despite the change in institutional shareholding.
The approval from the CCP reinforces the stability of the corporate regulatory environment in Pakistan, ensuring that large-scale acquisitions are vetted for anti-competitive behavior before they proceed. By confirming that the transaction is unlikely to substantially reduce competition or create market distortions, the regulator has cleared the path for the parties to finalize the deal. This move is expected to bring new strategic oversight to Engro Polymers as it continues to supply essential chemical components to the domestic market under its new shareholding structure.
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