The Competition Commission of Pakistan (CCP) has recently approved a series of mergers involving the Saudi Iron and Steel Company (Hadeed), marking a significant development in the steel industry’s landscape within Pakistan.
This approval facilitates a complex restructuring process involving two entities through three distinct transaction phases, aimed at enhancing operational efficiencies and market presence in Pakistan.
Hadeed, headquartered in Saudi Arabia, is recognized for its comprehensive range of steel products and its role in the Pakistani steel market through spot sales and exports via international traders.
The initial phase of the transaction involved the Public Investment Fund (PIF) of Saudi Arabia, a sovereign wealth fund with diverse global investments, acquiring 100% of Hadeed’s shareholding from the Saudi Basic Industries Corporation (SABIC).
This acquisition is part of a strategic initiative to consolidate PIF’s investments in the steel industry.
Following this, the second phase of the transaction saw Hadeed acquiring 100% shareholding of Al Rajhi Steel Industries Company from Mohammad Bin Abdulaziz Al Rajhi & Sons Investment.
Al Rajhi Steel, a subsidiary of Al Rajhi Invest established in 1978, is noted for its steel production capabilities within Saudi Arabia, involving a share exchange agreement to solidify this acquisition.
In the final phase, PIF plans to sell its 44.5% stake in Hadeed to Mohammad Bin Abdulaziz Al Rajhi & Sons Investment, enabling shared control over Hadeed and Al Rajhi Steel.
This strategic disposition is aimed at leveraging synergies between the two companies to enhance production capabilities and operational efficiency.
The CCP’s approval indicates that these transactions are unlikely to lead to competition concerns within the relevant markets.
This series of mergers and acquisitions is poised to impact the steel sector significantly, an industry crucial to Pakistan’s economic infrastructure and growth.
The restructuring is expected to foster advancements in production capabilities, operational efficiencies, and contribute positively to Pakistan’s GDP and overall economic benefits.
