Caixin News, July 8th (Editor Li Lin/Intern Editor Chen Yujia) - The Pakistan Competition Commission (CCP) recently announced that Saudi Arabian business giant Asyad Holding Group has successfully acquired 77.42% equity of Shell Pakistan Limited through its wholly-owned subsidiary Wafi Energy Holding Limited located in the United Arab Emirates, thereby gaining control of the company.
CCP stated that according to Article 11 of the 2010 Competition Law, the acquisition has been approved with the aim of promoting the development of Pakistan's retail oil industry.
Shell Oil announced its withdrawal from the Pakistani market in June 2023, selling 77.42% of its business in Pakistan to Wafi Energy. This decision was made after Shell announced multiple global business adjustments and Shell Pakistan suffered losses in 2022 due to exchange rate fluctuations, depreciation of the Pakistani rupee, and overdue accounts receivable.
This transaction has gone through at least a year of development. Although it will take about two months to fully complete the transaction and the shares in the lubricant business will be divested, the Shell brand will continue to have its influence in the Pakistani market.
Shell Pakistan Limited, as a listed company on the Pakistan Stock Exchange, has a huge business network in the retail supply of automotive fuels and lubricants. Shell Pakistan's business covers over 600 gas stations, 10 fuel terminals, a lubricant blending plant, and a 26% stake in Pak Arab Pipeline Company Limited.
Wafi Energy is a wholly-owned subsidiary of Saudi fuel retailer Asyad Holding Group established to expand its investment in Pakistan, focusing on the management and operation of gas stations in Saudi Arabia.
CCP identified retail fuel, vehicle lubricants, and industrial lubricants as the relevant product markets in its preliminary evaluation stage, and pointed out that Shell Pakistan holds unique shares in these three markets, but this share will remain unchanged after the transaction. After CCP analysis, it was confirmed that even if Wafi Energy Holding Limited obtains direct control of Shell Pakistan, it will not dominate the relevant market.
Dr. Kabir Ahmed Sidhu, Chairman of the CCP, stated during the signing of the approval order that this development is expected to further promote market competition and make significant contributions to the prosperity of the Pakistani market by improving the service standards of the retail fuel supply chain. This acquisition not only marks the deepening layout of Asyad Holding Group in the energy market of Pakistan, but also foreshadows a new competitive landscape for the retail oil industry in Pakistan.