The Competition Commission of Pakistan (CCP) has approved the acquisition of Fauji Foundation’s Fauji Cereals business by Fauji Foods Limited, the regulator informed on Tuesday.
The Fauji Foundation submitted a pre-merger application to the CCP under Section 11 of the Competition Act, 2010.
“The proposed transaction involves the acquisition of the Fauji Cereals business by Fauji Foods Limited through a Business Transfer Agreement. Fauji Foods Limited is a publicly listed company incorporated in Pakistan, primarily focused on the production and sale of dairy and allied products,” said CCP spokesperson in a statement.
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Fauji Cereals (established in 1954), a fully owned company of Fauji Foundation in collaboration with Quaker Oats, England started trial production operation by end 1956.
“CCP’s assessment of the pre-merger application indicated that there were no overlaps between the merging parties in the areas of business activities such as breakfast cereals and wheat, barley and porridge. Therefore, the CCP concluded that market conditions will remain unchanged post-transaction, with no significant alteration to the competitive landscape in these product categories,” spokesperson added.
Following competition assessment, CCP concluded that the proposed transaction involved the acquisition of shares and did not suggest any substantial lessening of competition or the creation or strengthening of a dominant position in the relevant market.
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“Restructuring will ensure the breakfast cereal business is consolidated under one arm and result in future profitability,” the regulator said.
Under the umbrella of the Fauji Group of Companies, with major shareholding by FFBL – Fauji Foods Limited was founded in 2015 after the acquisition of Noon Pakistan Limited, a company with an over 50-year dairy legacy in Pakistan.
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