The Competition Commission of Pakistan (CCP) has given the green light to a Scheme of Arrangements for PIA Holding Company Limited (Holdco) to acquire 100% shareholding of Pakistan International Airlines Corporation Limited (PIA). This approval marks a significant step in the Government of Pakistan’s ongoing privatization efforts for PIA.
Holdco, a publicly owned company fully controlled by the Government of Pakistan, was recently established to take over PIA’s specified assets, liabilities, and subsidiaries, encompassing its domestic and international operations, including business, property, rights, and obligations. PIA, listed on the stock exchange, offers aviation and related services such as engineering, handling, cargo, flight kitchens, and training.
The Federal Government endorsed the transaction based on the ‘Divestment of PIACL – Legal Segregation Plan and Transaction Structure’ presented by the Privatisation Division on February 6, 2024. As per the approved Scheme, Holdco will acquire 100% shareholding of PIA, alongside the transfer of Non-Core Assets and Non-Core Liabilities of PIA to Holdco.
In this case, the relevant market identified is the real estate market in Pakistan, as PIA possesses properties nationwide with similar competitive conditions. However, PIA’s core aviation activities and allied services will stay within the company and will not be transferred to Holdco.
CCP’s evaluation determined that the proposed transaction would not result in Holdco’s dominance in the relevant market post-transaction, as defined under Section 2(1)(e) read with Section 3 of the Act. Consequently, CCP has approved the merger in Phase I.
CCP’s swift approval of this merger underscores its dedication to advancing the Government of Pakistan’s economic revitalization strategy, notably in attracting investment via the Special Investment Facilitation Council (SIFC).
