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., following a Phase-I competition assessment under the Competition Act, 2010.
The transaction involves the purchase of shares from two Chinese companies, Shanghai Challenge Textile Company Limited and Zhejiang Xinao Industry Company Limited, under a Share Purchase Agreement.
UAE-Based Velora Global Ventures Enters Masood Textile Mills
Velora Global Ventures-F.Z.C. is incorporated and registered with the Ajman Free Zone Authority in the United Arab Emirates.
The company is engaged in wholesale trading of textiles and clothing as well as commercial brokerage activities outside Pakistan.
Its associated companies, Gulf Textile Sourcing F.Z.C. and Zara Textile Trading F.Z.C., operate in international textile sourcing and trading, customer development and order coordination.
Masood Textile Mills is a publicly listed Pakistani company involved in the manufacture and sale of cotton and synthetic fibre yarn, knitted and dyed fabrics, and garments.
CCP Reviews Competition Impact
As part of its Phase-I assessment, the CCP examined whether the proposed acquisition could substantially lessen competition or create or strengthen a dominant position in the relevant markets.
The Commission found that Velora Global Ventures had no pre-merger market presence in Pakistan.
Based on the assessment, the acquisition is not expected to materially alter Masood Textile Mills’ output, domestic sales or existing market position.
Vertical Relationship Also Assessed
The CCP also reviewed a potential vertical relationship between Velora Global Ventures’ international textile trading activities and Masood Textile Mills’ manufacturing operations.
The Commission found that the nature and scope of the respective businesses did not indicate competition concerns arising from the relationship.
The assessment also determined that the transaction would not create entry barriers or significantly increase the acquirer’s market power.
Transaction Approved Under Competition Act
Following its Phase-I review, the CCP authorized the transaction under Section 31(1)(d)(i) of the Competition Act, 2010.
The approval allows the acquisition to proceed from a competition-law perspective, subject to any other applicable regulatory or legal requirements.
The CCP said its merger-control framework is intended to provide timely and transparent review of mergers and acquisitions while ensuring that transactions do not adversely affect competition.
The Commission also highlighted the role of effective merger review in providing regulatory certainty, supporting foreign direct investment and business expansion, and protecting competitive markets and consumer interests in Pakistan.