FFC’s current share in the fertiliser industry is 48 per cent, while Agritech’s is six per cent. The hearing was chaired by CCP Chairperson Rahat Kaunain Hassan.
As part of the second phase review, the CCP provided an opportunity to the parties to respond to the submitted concerns of CCP in a proposed merger that involves potentially significant market concentration in the fertiliser market.
During the course of the hearing, the CCP bench asked Agritech to demonstrate that it had attempted to attract competitive acquisition bids from companies both in the domestic and international market, as claimed. Furthermore, the CCP bench asked Agritech to demonstrate on what basis it believed the firm was failing.
FFC’s counsel stated that the company is interested in a consolidated acquisition of Agritech, which will result in significant synergies and efficiencies for FFC. The CCP bench asked whether such efficiencies would result in a cheaper product for the consumer but the FFC did not make any such commitment. The bench pointed out that Agritech’s product was already cheaper than the FFC product and their argument for greater economies of scale could not be justified.
Published in The Express Tribune, October 28th, 2010.
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