CCP Approves Engro, Dawood Hercules Corporation Restructuring Plan

The Competition Commission of Pakistan (CCP) has approved a merger for capital allocation and resilience portfolio. The approved transaction entails an internal group restructuring through a Court sanctioned scheme of arrangement under Sections 279 to 282 and 285(8) of the Companies Act, 2017. The group restructuring involves three merging parties, namely M/s Dawood Hercules Corporation Ltd, M/s Engro Corporation Ltd and M/s DH Partners Ltd. DH Corp is a public listed company that deploys and manages equity investments across a diverse range of sectors in Pakistan. Apart from the capital deployed through its subsidiaries, DH Corp actively invests in local public equities and money markets and are currently evaluating investment opportunities in the private space. Meanwhile, Engro Corporation is amongst one of the largest Pakistani conglomerates with business expansion in essential sectors like fertilizer, PVC resin, food, energy, LNG terminals, telecommunication infrastructure, chemical terminal and storage facilities. The proposed restructuring will make Engro Corp the wholly-owned subsidiary of DH Corp. whereas, a carved out portfolio of DH Corp would be transferred to DH Partners. The CCP’s Phase I competition assessment identified ‘Investment Services’ as the reportable product market. The market position of the merging parties would remain the same, leading no suspicion of dominance in reportable market. With this approval, CCP aims to synergize the capital allocation efforts of Pakistan’s leading industrial giants which are presently pursuing investments independently. With a productive capital deployments, the industrial players will be adequately facilitated especially in a challenging macroeconomic landscape.