The Competition Commission of Pakistan (CCP) has granted Sultan Spinning Industries (Private) Limited approval for the acquisition of certain assets of Crescent Cotton Mills Limited, including land, equipment and machinery.
Identifying the relevant product market as “yarn”—segmented into cotton, synthetic, and blended yarn, based on differences in production, consumer preferences and pricing—the CCP determined that Crescent holds a minimal market share. It further noted the market share would diminish further after the transaction, as the relevant assets would no longer contribute to its operations.
According to the CCP, Sultan’s market entry could invigorate competition by introducing a new participant in the yarn industry. This may, it said, stimulate competitive pricing, innovation and increased product availability, benefiting consumers and the broader market.
The CCP’s Phase I assessment concluded that the transaction poses no risk of reducing competition, but rather paves the way for enhanced consumer choice and 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.
Sultan Spinning Industries is a private limited company incorporated under the laws of Pakistan that has yet to commence operations but intends to engage in the manufacturing and sale of yarn. Crescent Cotton Mills is a publicly listed company currently engaged in the manufacturing and sale of yarn.