CCP okays beverage company acquisition

ISLAMABAD: The Competition Commission of Pakistan (CCP) has granted approval to acquisition of Coca-Cola (Pakistan) under Phase-1 review of the Competition Act, 2010 and the Competition (Merger Control) Regulations, 2016.

Coca-Cola içecek (Turkey) acquired 49.67 percent shareholding of Coca Cola (Pakistan) through CCI International Holand (one of its subsidiaries) from Atlantic Industries. The transaction involves total consideration of dollar 300 million.

After this transaction, Coca-Cola Turkey will own majority of shareholding in Coca-Cola (Pakistan) with management. This is significant vote of confidence that Pakistani economy has great potential for above-average returns on their capital for international investors.

The Chairman and Mergers team has streamlined merger system and process to expedite mergers/acquisitions applications to facilitate international investors.

On August 21, 2023 the Competition Commission of Pakistan received a pre-merger Application submitted jointly by the parties including M/s CCI International Holland B.V. (Acquirer) and M/s Atlantic Industries (Seller).

The proposed transaction entails acquisition of additional 49.67pc shareholding of M/s Coca-Cola Beverages Pakistan Limited (Target), by the Acquirer, from the Seller pursuant to Share Purchase Agreement. The Application was submitted under Section 11 of the Competition Act, 2010 read in conjunction with Regulation 6 of the Competition (Merger Control) Regulations, 2016 (Merger Regulations). All requisite information/documentation pertaining to the Application was completed on September 26, 2023.

The Commission has examined the Application as well as all the documents attached therewith and the information provided by the concerned undertaking(s). The Phase-I competition assessment of the intended transaction has revealed the following facts.

The business activities of the undertakings concerned are: The Acquirer: A private limited company incorporated in the Netherlands. Its principal activity is of a holding company. The Acquirer is a wholly owned subsidiary of M/s Coca-Cola içecek (Ultimate Acquirer), a company existing under the laws of Türkiye. The Ultimate Acquirer owns 49.67pc shareholding of the Target and has the management control.

The Target: An unlisted public limited company incorporated in Pakistan. It is engaged in production, selling, trading and distribution of carbonated and non-carbonated beverages with the trade mark of Coca-Cola.

The Seller: A corporation organised under the laws of Cayman Islands and is a holding company. As submitted in the Application and set out in the Agreement, the transaction relates to acquisition of 49.67pc shareholding of the Target by the Acquirer from the Seller.

Total consideration for the proposed acquisition amounts to 300,000,000 dollar. The relevant product market in this case has been identified as Beverages - Non-alcoholic ready to drink - and the relevant geographic market is Pakistan.