Islamabad, February 24, 2024 – The Competition Commission of Pakistan (CCP) has given the green light to three pivotal mergers involving the Saudi Iron and Steel Company (Hadeed), a major player in Pakistan’s steel market.
The comprehensive transaction, unfolding in three stages, signifies a significant restructuring of two entities, as outlined in a press statement released by the commission on Saturday.
Hadeed, headquartered in Saudi Arabia, is a well-established company renowned for producing a diverse range of steel products. Its involvement in spot sales within Pakistan’s steel market and international exports to Pakistan through global traders underscores its strategic importance.
The initial phase saw the Public Investment Fund (PIF), a sovereign wealth fund of Saudi Arabia with global investments, submitting a pre-merger application to the CCP. The application sought approval for PIF’s acquisition of a 100% shareholding in Hadeed from the Saudi Basic Industries Corporation (“SABIC”). A share purchase agreement was established between PIF and SABIC, leading to the complete divestiture of Hadeed’s share capital by SABIC to PIF.
In the subsequent step, Hadeed aimed to acquire a 100% shareholding in Al Rajhi Steel Industries Company from M/s. Mohammad Bin Abdulaziz Al Rajhi & Sons Investment. Al Rajhi Steel, a subsidiary of Al Rajhi Invest established in 1978, is recognized for its steel manufacturing capabilities in Saudi Arabia. This stage involved a strategic share exchange agreement between Hadeed and Al Rajhi Invest.
The final stage of the merger involves PIF disposing of its 44.5% shareholding in Hadeed to M/s. Mohammad Bin Abdulaziz Al Rajhi & Sons Investment. This move is designed to establish shared control over both Hadeed and Al Rajhi Steel, aiming to enhance production capabilities and operational efficiency.
Notably, the CCP has determined that these transactions do not pose any competition concerns in the relevant market. The steel sector holds immense significance in Pakistan’s economic landscape, playing a pivotal role in contributing to GDP growth. Investments and strategic mergers in this sector are poised to bring substantial benefits to both the national economy and the investors involved. The approvals granted by the CCP mark a positive stride in the evolution of the steel industry in Pakistan.
