Islamabad: The Competition Commission of Pakistan (CCP) here on Tuesday approved the acquisition of controlling equity interests in DSM-Firmenich’s Animal Nutrition and Health Business by four investment vehicles indirectly owned and financed by CVC Fund IX, following a Phase-I competition assessment.
DSM’s Animal Nutrition and Health Business operates in Pakistan through DSM-Firmenich Pakistan (Private) Limited, said CCP press release issued here.
The proposed transaction was therefore reviewed under Section 11 of the Competition Act, 2010 to assess whether it could create or strengthen a dominant position or otherwise raise competition concerns in the relevant markets in Pakistan.
Under the transaction, DSM B. V. , a Netherlands-based company and wholly owned subsidiary of Swiss-based DSM-Firmenich AG, would reorganise its Animal Nutrition and Health Business into two separate entities: SpecialtyCo Business and EssentialCo Business.
DSM-Firmenich Group would retain non-controlling equity interests, while the CVC-backed acquirers would acquire controlling equity interests and corresponding voting rights in both entities.
The acquirers comprise Specialty Bidco B. V. and Essential Bidco B. V. , incorporated in the Netherlands, and Specialty (U. S. ) Bidco Inc. and Essential (U. S. ) Bidco Inc. , incorporated in Delaware, USA. All four are newly incorporated investment vehicles indirectly owned and financed by CVC Fund IX, which is managed and advised by affiliates of CVC Capital Partners plc.
DSM’s animal nutrition and health business produces animal nutrition ingredients across essential products, including vitamins and carotenoids, performance solutions, premixes, precision services and aroma ingredients.
CCP’s assessment found that the acquirers, CVC Fund IX and their controlled portfolio companies are not active in Pakistan in any of the relevant product markets in which DSM’s business operates.
The transaction therefore creates no horizontal overlap or vertical relationship and will not increase market share or market concentration in Pakistan.
The Commission concluded that the transaction is unlikely to create entry barriers, materially enhance market power or substantially lessen competition. It therefore authorised the transaction under the Competition Act, 2010.
