The Competition Commission of Pakistan recently approved a major corporate transaction involving Lotte Chemical Pakistan Limited acquiring a shareholding in Engro Polymer & Chemicals Limited from Engro Corporation Limited. Regulators cleared the purchase following a Phase-I competition assessment conducted under the Competition Act, 2010.
Lotte Chemical Pakistan Limited functions as a public limited company manufacturing and supplying Purified Terephthalic Acid across Pakistan, which manufacturers use to create polyester and polyethylene terephthalate. Meanwhile, Engro Polymer & Chemicals Limited produces Polyvinyl Chloride, caustic soda, hydrogen peroxide, and other chlor-alkali goods.
Market Impact & Competition Analysis
During the formal evaluation, the Competition Commission of Pakistan designated PVC, caustic soda, and hydrogen peroxide as relevant product markets across Pakistan as the geographic market. Regulators noted that Lotte Chemical Pakistan Limited does not operate within these specific markets, and neither the company nor its affiliates purchase items from Engro Polymer & Chemicals Limited, resulting in zero horizontal or vertical overlap.
Engro Polymer & Chemicals Limited remains the sole domestic manufacturer in the local PVC market, facing competitive pressure from foreign imports, while holding lower market shares in caustic soda and hydrogen peroxide alongside other industry participants.
Final Verdict & Market Benefits
The Competition Commission of Pakistan determined that the transaction represents an ownership and control shift without raising production capacity, total sales, or output, meaning it will not elevate market concentration, build entry barriers, or enhance market power.
Concluding the Phase-I review, the Commission declared that the acquisition is unlikely to lessen competition or create a dominant market position, formally authorizing the deal under Section 31(1)(d)(i) of the Competition Act, 2010.
