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., allowing the company to acquire shares in the Pakistani textile manufacturer from two Chinese companies. The approval followed a Phase-I competition assessment conducted under the Competition Act, 2010, with the commission determining that the proposed transaction did not raise concerns regarding competition in the relevant markets.
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 through a Share Purchase Agreement. The transaction was reviewed by the CCP as part of its merger-control process, which examines whether proposed acquisitions could substantially lessen competition or result in the creation or strengthening of a dominant position within relevant markets in Pakistan.
Velora Global Ventures is incorporated with the Ajman Free Zone Authority in the United Arab Emirates and is engaged in wholesale trading of textiles and clothing, along with 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. The acquisition therefore brings together an international textile trading group and a Pakistani company involved in textile manufacturing and sales.
Masood Textile Mills is a publicly listed Pakistani company with operations covering several stages of textile production. The company manufactures and sells cotton and synthetic fibre yarn, knitted and dyed fabrics and garments. The CCP considered the nature of Masood Textile Mills’ operations alongside the business activities of the acquiring company and its associated entities while assessing the possible effects of the transaction on competition in the relevant markets.
As part of its Phase-I review, the CCP examined the existing market position of Velora Global Ventures in Pakistan and found that the company had no pre-merger market presence in the country. Based on this assessment, the commission determined that the acquisition was not expected to result in any material change to Masood Textile Mills’ output, domestic sales or overall market position. The absence of an existing market presence by the acquirer was therefore an important factor in the commission’s competition assessment.
The CCP also considered whether a potential vertical relationship could emerge between Velora Global Ventures’ international textile trading activities and Masood Textile Mills’ manufacturing operations. The commission assessed the scope and nature of the respective businesses and concluded that the relationship did not raise competition concerns. According to the CCP, the transaction would not create entry barriers or significantly increase the market power of the acquiring company in a manner that could adversely affect competition.
Following the assessment, the CCP authorised the transaction under Section 31(1)(d)(i) of the Competition Act, 2010. The approval allows the proposed share acquisition to proceed from a competition-law perspective following the commission’s Phase-I review. The decision forms part of the CCP’s broader role in reviewing mergers and acquisitions involving businesses operating in Pakistan.
The commission said timely and transparent reviews of mergers and acquisitions can support investment and economic activity while ensuring that transactions do not negatively affect competitive conditions. It added that an effective merger-control framework can provide regulatory certainty for businesses, support foreign direct investment and expansion, and protect competitive markets and consumer interests in Pakistan.
The approval also comes against the backdrop of continued international participation in Pakistan’s textile sector, with the transaction involving an investor based in the United Arab Emirates and shares being acquired from Chinese companies. Masood Textile Mills’ existing manufacturing activities cover yarn, fabrics and garments, while the acquiring group has international textile sourcing and trading interests. The CCP’s assessment concluded that the proposed change in shareholding did not present material competition concerns under the applicable provisions of the Competition Act, 2010.
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