OECD kpcdb

1. Scope

 

Section 11 prohibits mergers that would substantially lessen competition by creating or strengthening a dominant position in the relevant market.

 

2. Notification 

 

Section 11 requires merger parties to apply for clearance to the CCP of a proposed merger that meets the notification threshold provided in Section 4 of the Competition (Merger Control) Regulations 2016.

 

For merger parties, other than asset management companies, the notification thresholds are as follows:

 

a)  the value of gross assets of the undertaking, excluding value of goodwill, is not less than PKR300 million or the combined value of the undertaking and the undertaking(s) the shares of which are proposed to be acquired or the undertakings being merged, is not less than PKR1 billion; or

b)  annual turnover of the undertaking in the preceding year is not less than PKR500 million or the combined turnover of the undertaking and the undertaking(s) the shares of which are proposed to be acquired or the undertakings being merged is not less than PKR1 billion; and

c)  the transaction relates to acquisition of shares or assets of the value of PKR100 million or more; or

d)  in case of acquisition of shares by an undertaking, if an acquirer acquires voting shares, which taken together with voting shares, if any, held by the acquirer shall entitle the acquirer to more than 10% voting shares.

 

For merger parties, being asset management companies, the notification thresholds are as follows:

 

a)  the collective exposure for itself and in all of its collective investment schemes in a single entity is more than 25% of total voting rights; or 

b)  the value of total assets under management of an asset management company is PKR1 billion or more; and

c)  the transaction relates to acquisition of shares or assets of the value of PKR100 million or more; or

d)  in case of acquisition of shares by an undertaking, if an acquirer acquires voting shares, which taken together with voting shares, if any, held by the acquirer shall entitle the acquirer to more than 10% voting shares.

 

Pre-merger applications shall be deemed to have been made only when accompanied by a processing fee at rates prescribed in the table in Section 6 of the Competition (Merger Control) Regulations 2016.

 

3. Procedural Rules

 

The CCP decides within 30 working days of receipt of the application on whether the proposed merger meets the thresholds and the presumption of dominance as determined in Section 3 of the Act. Where the CCP considers that the proposed merger may not be consistent with merger rules, the CCP opens a second phase review and may require the merger parties to provide further information necessary for the determination. The CCP assesses within 90 working days of receipt of the request information whether the proposed merger will substantially lessen competition by creating or strengthening a dominant position in the relevant market.

 

After the second phase review, the CCP may nonetheless approve the intended merger that is considered to lessen competition, if it is shown that:

 

a)  the merger contributes substantially to the efficiency of the production or distribution of goods or to the provision of services;

b)  such efficiency could not reasonably have been achieved by a less restrictive means of competition;

c)  the benefits of such efficiency clearly outweigh the adverse effect of restriction on competition; or

d)  it is the least anti-competitive option for the failing undertaking’s assets, when one of the undertaking is faced with actual or imminent financial failure.

 

Procedural fairness: The CCP provides opportunities for consultation, if needed or requested by the parties.

 

4. Assessment 

 

The Competition (Merger Control) Regulations 2016 explains how merger assessment is conducted.

 

5. Remedies and sanctions

 

Under Section 31, the CCP may undo or prohibit the merger. The CCP may also impose administrative penalties (see Chapter I of this text on Remedies and sanctions).

 

Where the undertakings conducted a merger without clearance from the CCP, the CCP may, after giving the undertakings notice of its intentions or the opportunity of being heard, make appropriate orders set forth in Section 31.

 

 

* This information is based on Competition Law in Asia-Pacific: A Guide to Selected Jurisdictions (2018).