CCP okays DP World Logistics' acquisition
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The Competition Commission of Pakistan (CCP) has granted approval for the acquisition of a 60% shareholding in DP World Logistics FZE by the National Logistics Corporation (NLC). The Share Purchase Agreement between the parties was reached due to extensive efforts by the Special Investment Facilitation Council (SIFC) of Pakistan to invigorate economic growth in the country.
National Logistics Corporation (NLC), founded in 1978, is a state-owned entity governed by the National Logistics Corporation Act 2023 under the laws of Pakistan. It operates in the logistics, infrastructure, and transportation sectors, providing freight and logistics services both domestically and internationally.
The relevant product market for this transaction has been defined as 'Road Freight Logistics,' encompassing the transportation of goods and cargo via road networks. Geographically, the relevant market is identified as 'Pakistan,' given that NLC primarily operates within the country, and the joint venture will also conduct its operations domestically.
Following an in-depth analysis of the merger, the CCP determined that the transaction would not lessen competition or create or strengthen a dominant position in the relevant market, as defined under Section 2(1)(e) read with Section 3 of the Competition Act, 2010. Therefore, the CCP has authorized the transaction under Section 31(1)(d)(i) of the Act, as it does not pose any significant competition concerns.
This merger is expected to generate synergies without restricting competition. DWLF's entry into Pakistan's logistics market is anticipated to enhance supply chain efficiency rather than create exclusivity concerns. Additionally, no significant concerns arise regarding coordinated effects post-merger, reducing the likelihood of collusion.
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