The Competition Commission of Pakistan (CCP) has approved a major textile sector acquisition.

The deal involves UAE-based Velora Global Ventures F.Z.C. and Masood Textile Mills Limited.

The UAE Company will acquire shares in Masood Textile Mills from two Chinese companies.

The transaction was reviewed under a Phase I competition assessment. The review was conducted under the Competition Act, 2010.

Velora Global Ventures will purchase the shares from Shanghai Challenge Textile Company Limited. It will also acquire shares from Zhejiang Xinao Industry Company Limited.

The acquisition is being carried out under a Share Purchase Agreement between the parties.

Velora Global Ventures is registered with the Ajman Free Zone Authority. The UAE Company operates in international textile trading and clothing wholesale.

It also conducts commercial brokerage activities outside Pakistan. Its business activities include textile and clothing-related trade.

Velora has two associated companies involved in the global textile sector. These include Gulf Textile Sourcing F.Z.C. and Zara Textile Trading F.Z.C.

The associated companies work in international textile sourcing and trading. They also support customer development and order coordination.

Masood Textile Mills is a publicly listed Pakistani company. It operates across several areas of textile manufacturing.

The company produces cotton and synthetic fiber yarn. It also manufactures knitted and dyed fabrics and garments.

During its assessment, the CCP examined the possible competition effects of the acquisition.

The commission considered whether the deal could reduce competition significantly. It also assessed whether the transaction could create or strengthen market dominance.

According to the CCP, Velora had no market presence in Pakistan before the transaction.

The commission therefore found limited potential for major changes in the local market. It said Masood Textile Mills’ output is not expected to change materially.

The company’s domestic sales and overall market position are also not expected to change significantly.

The CCP also reviewed the relationship between both companies’ business activities. Velora operates in international textile trading, while Masood focuses on manufacturing.

The commission found no competition concerns from this potential vertical relationship.

It also concluded that the acquisition would not create significant entry barriers. The deal is not expected to substantially increase the acquirer’s market power.

Based on its Phase I assessment, the CCP approved the transaction.

The acquisition was authorized under Section 31(1)(d)(i) of the Competition Act, 2010.

The approval allows the UAE Company to proceed with the acquisition of the agreed shareholding in Masood Textile Mills.

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The decision follows the commission’s assessment of the transaction’s possible impact on competition in Pakistan’s textile market.