The Competition Commission of Pakistan (CCP) has approved the acquisition of a stake in Rafhan Maize Products Company Limited by a consortium led by Nishat Group-linked companies and associated individuals, following a Phase I review under the Competition Act, 2010.
The transaction involves the purchase of shares from Ingredion Incorporated, the majority shareholder, along with other individual investors. The buying consortium includes several major Nishat Group-linked entities such as Nishat Mills Limited, D.G. Khan Cement Company Limited, Nishat Hotels and Properties Limited, Lalpir Power Limited, Pakgen Power Limited, Nishat Power Limited, Nishat Chunian Power Limited, along with affiliated individuals.
Regulators examined the deal for any potential impact on market competition, particularly due to Rafhan Maize’s role in producing key industrial inputs like starch, glucose, dextrose, dextrin, and gluten-based products. One of the acquiring companies, Nishat Mills, operates in the textile sector where starch is used as a raw material, creating a vertical linkage between upstream and downstream markets.
However, the CCP concluded that the acquisition is unlikely to reduce competition or create a dominant market position. It noted that the presence of multiple domestic suppliers, along with import availability, would continue to restrict any possibility of market control or price manipulation.
The regulator also observed that starch accounts for a relatively small portion of production costs in the textile industry, limiting any risk of supply restriction or input foreclosure. Additionally, Rafhan does not have the incentive or capacity to restrict supply due to existing excess production capacity and strong market competition.
On the downstream side, the acquiring firms were also found not to possess sufficient market power to distort competition in textile manufacturing.
Based on these findings, the CCP approved the transaction under Section 31(1)(d)(i) of the Competition Act, 2010, stating that it does not create or strengthen a dominant position in the relevant market.
