Lotte Chemical Allowed to Buy Engro Polymer Stake

For context, the Competition Commission of Pakistan (CCP) has approved Lotte Chemical Pakistan Limited's (PSX: LOTCHEM) proposed acquisition of a stake in Engro Polymer & Chemicals Limited (PSX: EPCL) from Engro Corporation Limited (PSX: ENGRO), clearing the transaction after an initial competition review.

Key points

• The Commission authorized the transaction under Section 31(1)(d)(I) of the Competition Act, 2010.
• Its review discovered that Lotte Chemical Pakistan does not operate in any of these markets.
• Lotte Chemical Pakistan manufactures and supplies purified terephthalic acid (PTA), a raw material applied primarily to produce polyester and polyethylene terephthalate (PET).
• Engro Polymer is Pakistan's only domestic manufacturer of PVC, according to the CCP assessment.
• Engro Polymer manufactures polyvinyl chloride (PVC), caustic soda, hydrogen peroxide and other chlor-alkali products.

Meanwhile, the commission confirmed on October 20 that its Phase-I assessment under the Competition Act, 2010, identified the proposed accord unlikely to substantially reduce competition or create or strengthen a dominant market position. Pakistan's Olive Oil Production to Reach 716 Tons. What's Next?

Meanwhile, the commission assessed the transaction throughout three product markets: PVC, caustic soda and hydrogen peroxide, treating Pakistan as the relevant geographic market.

Its review discovered that Lotte Chemical Pakistan does not operate in any of these markets. The Commission additionally identified that neither Lotte Chemical Pakistan nor its associated, affiliated, or group firms purchase products from Engro Polymer.

Engro Polymer is Pakistan's only domestic manufacturer of PVC, according to the CCP assessment. Nevertheless, imports provide an notable source of competition in the market. BYD Pakistan Plant to Start Operations by Mid-December.

In the caustic soda and hydrogen peroxide markets, Engro Polymer has comparatively smaller market shares and faces competition from other participants.

In practice, the commission concluded that the transaction would change Engro Polymer's ownership and control but would not, by itself, growth the company's production capacity, sales or output.

In practice, the Commission authorized the transaction under Section 31(1)(d)(I) of the Competition Act, 2010. The approval allows the proposed ownership change to proceed from the competition-law perspective. It reflects the commission's stated approach of facilitating investment and corporate transactions while assessing their potential effects on competition, market efficiency and consumer welfare. Stay Connected with ProPakistani.

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Taken together, the developments around lotte Chemical Allowed to Buy Engro Polymer Stake point to a situation that is still moving, and the coming days should bring more clarity.