ISLAMABAD: The Competition Commission of Pakistan (CCP) has granted approval to three mergers concerning Saudi Iron and Steel Company (Hadeed), having a presence in local steel market.

The overall transaction comprises of restructuring of two entities divided into three stages of transactions.

Based in Saudi Arabia, Hadeed is a well-established company, producing a range of steel products. It deals in spot sales in Pakistan’s steel market and exports to Pakistan thro­ugh international traders.

Initially, M/s. The Public Investment Fund (PIF) sent a pre-merger application to CCP to acquire 100pc shareholding of Hadeed from M/s. Saudi Basic Industries Corporation (SABIC). PIF is a sovereign wealth fund of Saudi Arabia and is known for its diverse investments in various sectors globally.

PIF has entered into a share purchase agreement under which SABIC agrees to sell its entire share capital of Hadeed to PIF.

Moving on to the next step, Hadeed was to acquire 100pc shareholding of Al Rajhi Steel Industries Company from M/s Mohammad Bin Abdulaziz Al Rajhi & Sons Investment.

Al Rajhi Steel, established in 1978, is a subsidiary of Al Rajhi Invest and is known for its steel manufacturing capabilities in Saudi Arabia. This invo­lved a share exchange agreement between Had­eed and Al Rajhi Invest.

In the third stage, PIF intends to dispose of its 44.5pc shareholding in Hadeed to M/s Mohammad Bin Abdulaziz Al Rajhi & Sons Investment thus sharing control over Hadeed and Al Rajhi Steel for improving their respective production capabilities and increasing their operational efficiency.

These transactions, as per the information available, are not anticipated to raise any competition concerns in the relevant market.

The steel sector in Pakistan is one of the most important industries in the country. It plays a vital role and with investments, it can help raise the GDP and bring benefits to both the economy and investors.

Published in Dawn, February 25th, 2024