Islamabad, August 1, 2024 – The Competition Commission of Pakistan (CCP) has approved a significant merger in the steel industry with international implications, involving the EP Corporate Group (EPCG) acquiring over 20% shares from the German industrial conglomerate Thyssenkrupp.
This transaction, detailed in a press release issued on Wednesday, is poised to have a substantial impact on Pakistan’s industrial growth and economic stability.
The transaction specifies that EPCG will acquire a 20% stake in Thyssenkrupp Dritte Beteiligungsgesellschaft mbH and a 19.99% stake in Thyssenkrupp Vierte Beteiligungsgesellschaft mbH. This acquisition follows an Investment Agreement signed in April 2024. The two target companies jointly control M/s Thyssenkrupp Steel Europe AG, which operates in Pakistan through the sale of grain-oriented electrical steel.
Thyssenkrupp Steel Europe AG is engaged in the production, processing, distribution, and sale of flat carbon steel products, encompassing the integrated production chain. EPCG, on the other hand, is a joint-stock company registered in the Czech Republic, primarily functioning as a holding company.
The CCP’s competition assessment identified ‘grain-oriented electrical steel’ as the relevant product market. The analysis confirmed that Thyssenkrupp Steel Europe AG’s market share in Pakistan is minimal and will remain unchanged post-transaction, ensuring no market dominance will be established.
The CCP envisions that this merger will attract foreign investments, boost local steel production, and bolster Pakistan’s industrial growth and economic stability. Dr. Kabir Ahmed Sidhu, Chairman of the CCP, highlighted the strategic importance of this move, noting that it is expected to open up markets, encourage technological advancements, and create a more competitive landscape within Pakistan’s steel industry.
“This strategic move will significantly contribute to the overall economic development of the country, fostering innovation and efficiency,” Dr. Sidhu stated.
The approval of this merger by the CCP signals a positive outlook for the steel industry in Pakistan. The entry of EPCG into the market is anticipated to bring in advanced technological practices and investment that could lead to increased production capabilities and enhanced competition.
Stakeholders in the steel industry and economic analysts view this merger as a pivotal step towards achieving a more robust and diversified industrial base in Pakistan. The potential for increased foreign investment and the resultant economic benefits align with the government’s broader economic goals.
As the merger proceeds, the industry will be closely monitoring the developments and potential impacts on market dynamics, production processes, and overall economic health. The CCP’s decision underscores its commitment to maintaining fair competition while fostering growth and innovation in Pakistan’s industrial sectors.