CCP clears Fatima Fertilizer's Agritech share purchases
The Competition Commission of Pakistan has authorised Fatima Fertilizer Company Limited's acquisition of shares in Agritech Limited, after determining that the transaction would not substantially lessen competition or strengthen a dominant position in Pakistan's fertilizer market.
The transaction comprised two purchases of Agritech shares through the Pakistan Stock Exchange — an initial acquisition in 2023 and an additional acquisition in 2024. According to the commission, it assessed the shareholding acquired through both purchases as a single aggregate transaction under its Phase-I merger review. The review carried particular weight because both companies operate in the fertilizer sector, which supplies a critical input to Pakistan's agricultural economy. Fatima Fertilizer is a publicly listed manufacturer and supplier of fertilizers and chemicals, while Agritech produces and sells urea and granulated Single Super Phosphate fertilizer.
For its competition assessment, the CCP identified urea and SSP as the relevant product markets, with Pakistan as the relevant geographic market, and examined the market positions of Fatima Fertilizer, Agritech and their competitors alongside the likely effect of the acquisition on concentration and competitive conditions. The review found a horizontal overlap between the parties in the urea market, where the acquisition increased their combined market share, but the commission determined that the resulting change did not create entry barriers or significantly enhance the parties' market power. No competitive overlap arose in the SSP market because Fatima Fertilizer held no share in that segment, leaving Agritech's position there unchanged.
During the review, Fatima Fertilizer informed the CCP that it had subsequently divested its entire shareholding in Agritech and no longer intended to pursue control of the company. Fatima therefore held no shares in Agritech when the commission issued its determination. Taking the parties' market positions and the subsequent divestment into account, the CCP concluded that the transaction posed no risk of substantially lessening competition in either relevant market and did not create or strengthen a dominant position within the meaning of the Competition Act, 2010. It authorised the transaction under Section 31(1)(d)(i) of that act.
The case illustrates the role of merger scrutiny in the fertilizer industry, where changes in ownership and market concentration can carry wider implications for the availability and competitiveness of agricultural inputs and for production costs.
