ISLAMABAD: The Competition Commission of Pakistan (CCP) on Saturday approved a Scheme of Arrangements for the acquisition of 100% shareholding of Pakistan International Airlines Corporation Limited (PIA) by PIA Holding Company Limited (Holdco) as a part of the Government of Pakistan’s ongoing privatization process for the national flag carrier
Holdco, a public limited company, entirely-owned by the Government of Pakistan, was recently incorporated to thrive to specified assets, liabilities, and subsidiaries of the Pakistani Airline, including its business, property, rights, and obligations both at domestic and international levels. PIA, a publicly listed company, provides aviation and allied services such as engineering, handling, cargo, flight kitchen, training etc.
The Federal Government approved the transaction based on the ‘Divestment of PIACL – Legal Segregation Plan and Transaction Structure’ submitted by the Privatisation Division on February 6, 2024. As per the approved Scheme, Holdco would acquire 100% shareholding of PIA, and Non-Core Assets and Non-Core liabilities of PIA would also be transferred to Holdco.
The key market identified in this case is the real estate market in Pakistan, as PIA owns properties in different parts of the country with homogenous competition conditions. However, the basic aviation activities and allied services of PIA would be part of the company and would not be transferred to Holdco.
CCP’s assessment further maintained that the proposed transaction would not lead to the dominance of Holdco in the relevant market post-transaction, as defined under Section 2(1)(e) read with Section 3 of the Act. Therefore, CCP has authorized the merger in Phase-I.
