Competition Commission of Pakistan Approves Three KSA-Based Steel Sector Mergers

The Competition Commission of Pakistan (CCP) has given the green light to three mergers involving M/s Saudi Iron and Steel Company (Hadeed), which holds a stake in Pakistan’s steel market. The approval for mergers encompasses the restructuring of two entities across three stages of transactions.

Hadeed, headquartered in Saudi Arabia, is a prominent producer of steel products, engaging in spot sales within Pakistan’s steel market and exporting to the country through international traders.

In the initial phase, M/s The Public Investment Fund (PIF) submitted a pre-merger application to the CCP seeking to acquire 100% shareholding of Hadeed from M/s Saudi Basic Industries Corporation (“SABIC”). PIF, a sovereign wealth fund of Saudi Arabia known for its global investments across various sectors, has inked a share purchase agreement with SABIC, under which SABIC consents to offload its entire share capital of Hadeed to PIF.

Subsequently, Hadeed was slated to acquire 100% shareholding of Al Rajhi Steel Industries Company from M/s Mohammad Bin Abdulaziz Al Rajhi & Sons Investment. Established in 1978, Al Rajhi Steel is a subsidiary of Al Rajhi Invest and is renowned for its steel manufacturing capabilities in Saudi Arabia. This transaction involved a share exchange agreement between Hadeed and Al Rajhi Invest.

In the final stage, PIF aims to divest its 44.5% shareholding in Hadeed to M/s Mohammad Bin Abdulaziz Al Rajhi & Sons Investment, thereby sharing control over Hadeed and Al Rajhi Steel to enhance their production capabilities and operational efficiency.

According to available information, these transactions are not expected to raise any competition concerns in the relevant market.

Pakistan’s steel sector is a cornerstone industry in the nation, playing a pivotal role in economic growth. With increased investments, it holds the potential to bolster the GDP and yield benefits for both the economy and investors.