ISLAMABAD: The Competition Commission of Pakistan (CCP) has approved the merger of M/s TPL Life Insurance Limited with M/s Dar Es Salam Textile Mills Limited.
As announced earlier by TPL Corporation, the parent company of TPL Life insurance, in its notice to the Pakistan Stock Exchange in November 2023, the companies had already agreed upon the merger and were awaiting regulatory approvals like that of CCP.
The approval comes following the parties’ agreement into a Scheme of Arrangement under the Companies Act, 2017.
TPL Life Insurance Limited offers a range of services in life insurance, reinsurance, counter-reinsurance, and various guarantee and indemnity businesses. They offer products which include insurance related to endowment, pension funds, and transit, among others.
In its earlier notice shared with the PSX, TPL also clarified that under the terms of the scheme, the name of DSML will be changed to TPL Life Insurance Limited and the principal line of business will also be altered”. As a consequence of the merger, DSML shall issue shares to the shareholders of TPL Life based on a swap ratio of 1 (one) ordinary share of DSML for every 1 (one) ordinary share of TPL Life held by its shareholders,” read the notice.
Dar Es Salam Textile Mills Limited, incorporated as a public unlisted company in 1989, initially focused on manufacturing and selling yarn. However, the company ceased its textile operations in 2014 and has since been engaged only in general trading activities.
While the acquisition marks a positive step for Pakistan’s insurance industry, strengthening a key player with valuable assets, it also showcases the abysmal state of the country’s front running manufacturing sector, that is textile.
CCP’s thorough analysis determined that the proposed merger would not lead to dominance in the relevant market, as defined under the Competition Act, 2010, post-transaction. As a result, the merger earned swift approval from the Commission.
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isn’t it amazing to merge a textile mill or a general trader with an insurance company. Never heard such mergers anywhere else in the world.