Mohsin Siddiqui (Chief Reporter)
The Competition Commission of Pakistan (CCP) has officially approved three mergers related to M/s Saudi Iron and Steel Company (Hadeed), marking a significant move in Pakistan’s steel market landscape.
Hadeed, a prominent entity in the steel industry, has garnered approval from the CCP for a series of mergers aimed at restructuring its operations in Pakistan. The transactions, divided into three stages, are set to bolster Hadeed’s presence in the country’s steel market.
Originally based in Saudi Arabia, Hadeed is renowned for its wide array of steel products. The company actively engages in spot sales within Pakistan’s steel market and also exports its products to Pakistan through international traders.
The first phase of the mergers involved M/s The Public Investment Fund (PIF) submitting a pre-merger application to the CCP. PIF, a sovereign wealth fund of Saudi Arabia with extensive global investments, sought to acquire 100% shareholding of Hadeed from M/s Saudi Basic Industries Corporation (“SABIC”). A share purchase agreement was reached between PIF and SABIC, facilitating the acquisition.
In the subsequent phase, Hadeed proceeded to acquire 100% shareholding of 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, boasts significant steel manufacturing capabilities in Saudi Arabia. The transaction involved a share exchange agreement between Hadeed and Al Rajhi Invest.
The final stage of the mergers sees PIF intending to divest its 44.5% shareholding in Hadeed to M/s Mohammad Bin Abdulaziz Al Rajhi & Sons Investment. This strategic move aims at shared control over Hadeed and Al Rajhi Steel, with the goal of enhancing their production capacities and operational efficiency.
Importantly, these transactions have been thoroughly assessed and are not expected to raise any competition concerns in the relevant market, as per available information.
The steel sector holds immense significance in Pakistan’s economy, offering opportunities for GDP growth and mutual benefits for both the economy and investors alike. With these mergers, Hadeed positions itself for a more robust presence in Pakistan’s vital steel industry.
