Law: Competition Act, 2010

Section: 11

Competition Ordinance (XVI of 2010)--S. 11---Approval of merger of companies, application for---Company submitted its pre-merger application for the acquisition of 75% to 79.87% shares of other company---Company had pre-merger market share of more than 50% in the relevant product market before the proposed merger---Competition Commission considering that the proposed acquisition/merger, allowed, would not substantially lessen competition, issued its no objection to the bidding of the company for the proposed merger, subject to certain conditions---While, competition generally would derive undertakings to achieve efficiencies internally, the primary benefit of the mergers to the economy was their potential to produce substantial efficiencies by enhancing its ability; and incentive to compete---Efficiency claim, however, should not be vague or speculative and should be verifiable by reasonable means---Eventual benefit, from the consumer's perspective, was to see whether those efficiencies would result in lower price, improved quality, enhanced services or new products---Commission hoped that its decision would help achieving economics of scale in the industry leading to decrease in consumer prices without substantially lessening competition---Commission was also of the view that from trade would ensure competition, would keep competitive pressure on the local industry and would protect consumers from possible exploitation. ORDER Fauji Fertilizer Company Limited (hereinafter referred as to "FFC") submitted its pre-merger application on 2nd August, 2010 for the acquisition of 75% to 79.87% shares of 15 Ms. Agritech Limited (formerly Pak American Fertilizers Limited hereinafter referred to as `Agritech'). The Commission intimated FFC vide its letter dated 12th August, 2010 that the Commission has decided to move the case to Phase 2 Review, with the view to determine whether the merger situation is likely to substantially prevent or lessen competition in the market and to ascertain the probability that the merged entity in the post-merger market will behave competitively or cooperatively. The Commission under the Competition Act, 2010 (the 'Act') is obliged to…

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