Islamabad, Jan 22: The Competition Commission of Pakistan (CCP) has granted approval for the acquisition of certain assets, including land, equipment and machinery of Crescent Cotton Mills Limited (CCML) by Sultan Spinning Industries (Private) Limited (SSIL).
The CCP defined the relevant product market as ‘yarn,’ segmented into cotton, synthetic, and blended yarn, based on differences in production, consumer preferences and pricing. The assessment determined that CCML holds a minimal market share, which will diminish further post-transaction as the assets will no longer contribute to its operations.
In contrast, SSIL’s market entry is anticipated to invigorate competition by introducing a new participant in the yarn industry. This is expected to stimulate competitive pricing, innovation and increased product availability, benefiting consumers and the broader market.
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The CCP’s Phase I assessment concluded that the transaction poses no risk of lessening of competition. Instead, it paves the way for enhanced consumer choice and encourages fair competition. Additionally, the transaction involves the transfer of existing assets rather than the consolidation of market share, ensuring no additional barriers to entry for potential new competitors.
SSIL, a private limited company incorporated under the laws of Pakistan, has not yet commenced operations but intends to engage in the manufacturing and sale of yarn once operational. Meanwhile, CCML, a publicly listed company, remains engaged in the manufacturing and sale of yarn.
