Pakistan Merger Control Thresholds 2026, CCP Notification Tests, Fees & Timelines

Every acquisition, merger or joint venture involving businesses that operate in Pakistan must be tested against the Pakistan merger control thresholds set out by the Competition Commission of Pakistan (CCP) before the transaction can close. Under the Competition Act, 2010 and the Competition (Merger Control) Regulations, 2016, parties whose combined assets or turnover in Pakistan exceed specified monetary levels are required to file a pre-merger notification with the CCP and wait for clearance. Failure to notify, or, worse, completing the deal before clearance is granted, exposes acquirers to substantial fines, unwinding orders and reputational damage.

This guide walks deal teams through the statutory tests, current threshold levels, CCP filing fees, review timelines and the complete document checklist needed to achieve a smooth clearance in 2026.

Legal Framework: Competition Act 2010 and Merger Control Regulations 2016

Pakistan’s merger-control regime is built on two interlocking instruments. The Competition Act, 2010 establishes the CCP as the sole competition regulator and grants it authority under Section 11 to review mergers, acquisitions and joint ventures that may substantially lessen competition. The Act prohibits any person from giving effect to a merger that exceeds the prescribed thresholds without first obtaining CCP clearance. The detailed rules, threshold formulae, filing forms, timelines and fee schedules, are then fleshed out in the Competition (Merger Control) Regulations, 2016, which replaced the earlier 2007 regulations and remain the operative secondary legislation for pre-merger notification in Pakistan.

Importantly, the CCP retains the power to amend threshold levels and fee schedules by notification in the official Gazette without requiring a full legislative amendment. Deal teams should therefore confirm the prevailing figures directly with the CCP at the time of filing.

Key Statutory Definitions

• Undertaking. Any natural or legal person engaged in economic activity, including a company, partnership, sole trader, trust or government-owned entity operating commercially.
• Associated undertaking. An entity in which an undertaking (directly or indirectly) holds voting rights or board representation giving it the ability to materially influence commercial policy. Includes subsidiaries, holding companies and entities under common control.
• Control. The ability, whether through share ownership, contractual arrangements, management rights or otherwise, to exercise decisive influence over the strategic commercial behaviour of another undertaking.
• Merger. Defined broadly to cover full legal mergers, acquisitions of shares or assets conferring control, and the creation of joint ventures performing on a lasting basis all the functions of an autonomous economic entity.

Pakistan Merger Control Thresholds and Jurisdictional Tests, Who Must Notify

Under the Competition (Merger Control) Regulations, 2016, a transaction triggers a mandatory pre-merger notification to the CCP when the parties, individually or on a combined basis, meet or exceed the prescribed Pakistan merger notification thresholds. The Regulations apply two financial tests: an assets test and a turnover test. Meeting either test is sufficient to trigger the filing obligation.

The Assets Test

The assets test looks at the gross value of assets in Pakistan. Under the Regulations, a merger requires notification where the value of the gross assets in Pakistan of the acquired undertaking (or the merged or combined undertaking) exceeds the prescribed assets threshold. Assets are measured at book value as shown in the most recent audited financial statements. Where the target is an unincorporated business or asset package, the acquirer must include the fair value of all assets being transferred.

The Turnover Test

The turnover test examines the annual turnover generated in Pakistan by the parties in their preceding financial year. Turnover includes net revenue from the sale of products and provision of services in Pakistan, after deduction of sales rebates and value-added tax. The test is satisfied when the turnover in Pakistan of the undertaking being acquired, or the combined turnover of the merging parties, meets or exceeds the prescribed turnover level.

Undertaking-and-Group Approach, How to Aggregate Figures

For both tests, figures are calculated on a group basis. That means the assets and turnover of the notifying party are aggregated with those of all its associated undertakings, parent companies, subsidiaries and entities under common control. The aggregation follows the concept of an “undertaking concerned” set out in the Regulations and mirrors the ICN recommended approach for Pakistan.

Practical aggregation rules to follow:

• Upward aggregation. Include the ultimate parent company and all intermediary holding entities in the chain of control above the direct acquirer.
• Downward aggregation. Include every subsidiary or controlled entity below the acquiring entity.
• Horizontal aggregation. Include sister companies or affiliates that are under the common control of the same ultimate parent.
• Exclude portfolio holdings. Passive financial holdings (typically below 10 % with no board representation or veto rights) are generally excluded unless they confer material influence.

Associated Undertakings and Attribution Rules

The Regulations require the notifying party to disclose all associated undertakings and to attribute their financial data for threshold purposes. The test for association is functional, it asks whether the relationship gives one entity the ability to exercise material influence over the commercial policy of the other. Common indicators include holding more than 25 % of voting rights, the right to appoint or remove a majority of directors, or contractual arrangements that confer veto rights over strategic decisions.

Special Rules for Foreign Acquirers and Cross-Border Deals

Foreign-to-foreign transactions are caught by the Pakistan merger control regime whenever the target, or the acquirer’s group, has assets or turnover in Pakistan that meet the thresholds. There is no exemption for off-shore deals, the connecting factor is the location of the economic activity, not the jurisdiction of incorporation. In practice, this means a global acquisition by a multinational buyer may require a CCP filing if the target operates a subsidiary, branch or joint venture in Pakistan that crosses the threshold levels.

For cross-border filings, supporting documents in languages other than English or Urdu must be accompanied by certified translations, and foreign financial statements must be converted to Pakistani Rupees at the State Bank of Pakistan exchange rate prevailing on the balance-sheet date.

Turnover and Assets Levels, Worked Threshold Examples

The Competition (Merger Control) Regulations, 2016 specify monetary thresholds denominated in Pakistani Rupees. The CCP has the power to revise these figures, so deal teams should verify the current levels on the CCP website before filing. The table below illustrates the structure of the threshold tests as set out in the Regulations.

The following three worked examples show how the jurisdictional tests are applied in practice. Figures are illustrative and designed to demonstrate the aggregation methodology rather than state current threshold amounts. Always confirm prevailing threshold values directly with the CCP.

Worked Example A, Local SME Acquisition

• Transaction. A Lahore-based manufacturing company (Acquirer) proposes to buy 100 % of the shares of a small Karachi engineering firm (Target).
• Step 1, Identify group. Acquirer has one wholly-owned subsidiary; Target is a standalone company with no subsidiaries.
• Step 2, Aggregate assets. Acquirer group gross assets in Pakistan: PKR 250 million. Target gross assets: PKR 120 million. Combined: PKR 370 million.
• Step 3, Aggregate turnover. Acquirer group turnover in Pakistan: PKR 180 million. Target turnover: PKR 90 million. Combined: PKR 270 million.
• Step 4, Compare to thresholds. If neither the target’s standalone figures nor the combined figures cross the prescribed threshold, no filing is required. In this illustrative scenario, the transaction falls below the threshold, no CCP notification needed.

Worked Example B, Large Public Company Share Purchase

• Transaction. A Karachi-listed conglomerate (Acquirer, PSX-listed) buys a controlling stake (51 %) in a listed FMCG company (Target, PSX-listed).
• Step 1, Identify group. Acquirer group includes five subsidiaries and two joint ventures in Pakistan. Target group includes three subsidiaries.
• Step 2, Aggregate assets. Acquirer group gross assets in Pakistan: PKR 15 billion. Target group gross assets: PKR 8 billion. Combined: PKR 23 billion.
• Step 3, Aggregate turnover. Acquirer group turnover: PKR 20 billion. Target group turnover: PKR 12 billion. Combined: PKR 32 billion.
• Step 4, Compare. Both asset and turnover figures substantially exceed the prescribed thresholds, mandatory CCP pre-merger notification required. Additionally, because both parties are listed on PSX and the acquirer is acquiring more than a specified percentage of voting shares, public offer requirements under the SECP Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations may also be triggered.

Worked Example C, Cross-Border Group Acquisition

• Transaction. A UAE-headquartered holding company (Foreign Acquirer) proposes to purchase 100 % of a Dubai-incorporated intermediate holding company that owns a Pakistani operating subsidiary (Target Sub).
• Step 1, Identify Pakistan nexus. Target Sub operates a cement plant in Punjab with gross assets of PKR 6 billion and annual turnover of PKR 4 billion. Foreign Acquirer has no other Pakistan operations.
• Step 2, Aggregate. Only Target Sub’s Pakistan figures are relevant. Foreign Acquirer’s global figures are not counted, the test focuses on assets and turnover in Pakistan.
• Step 3, Compare. Target Sub’s Pakistan assets and turnover exceed the thresholds, CCP notification is mandatory even though the transaction is structured off-shore.

Reporting Obligations by Entity Type

CCP Merger Filing Fees and Payment Mechanics

The Competition (Merger Control) Regulations, 2016 empower the CCP to prescribe filing fees, which are payable at the time of submitting the pre-merger notification application. Fee bands are structured by reference to the value of the transaction or the combined assets/turnover of the parties. Practitioner guides, including the Lex Mundi merger-notification guide for Pakistan, confirm that fees are denominated in Pakistani Rupees and are payable by bank draft, pay order or through the CCP’s online portal where electronic filing facilities are available.

Because the CCP retains the discretion to revise fee schedules by Gazette notification, acquirers should confirm the applicable fee directly with the CCP or check the latest schedule published on the CCP website before submitting their application. Industry observers expect that the CCP may periodically adjust fee bands to reflect inflation and transaction-value changes; early indications suggest that confirmatory checks at the point of filing are becoming standard practice among experienced deal teams.

Typical Professional Costs

• Legal counsel fees. Preparation of the notification, supporting documents, market definition analysis and management of CCP queries typically accounts for the largest professional cost. Fees vary with deal complexity.
• Economic analysis. Where a Phase II review is anticipated, for example, in concentrated markets, parties may engage competition economists to prepare market-share analyses and competitive-effects assessments.
• Translation and notarisation. Cross-border transactions involving foreign-language documents will require certified translations and notarised copies, adding modest incremental cost.

Pakistan Merger Control Timeline, Review Phases and Practical Durations

The CCP’s review of a pre-merger notification proceeds in two phases. Phase I is the initial screening stage, during which the CCP assesses whether the transaction raises prima facie competition concerns. If no concerns are identified, the CCP grants clearance at the end of Phase I without proceeding further. If concerns are identified, the CCP initiates a Phase II in-depth review.

Under the Competition (Merger Control) Regulations, 2016, the CCP is required to complete Phase I within a specified number of days from receipt of a complete application. Phase II, if triggered, has its own statutory timeframe. In both phases, the clock may be stopped if the CCP issues information requests that require a response from the parties, this “stop-clock” mechanism means that the effective elapsed time can exceed the nominal statutory period.

Industry observers note that straightforward, non-problematic transactions are routinely cleared within Phase I. Phase II reviews remain relatively uncommon but are more likely in sectors with high market concentration, such as cement, telecommunications and banking, where the CCP has historically been more active.

Pre-Merger Notification Pakistan, Filing Process and Required Documents Checklist

The CCP’s filing process begins with the submission of a completed pre-merger notification application form, together with a prescribed set of supporting documents. The application form is set out in the schedules to the Competition (Merger Control) Regulations, 2016 and is available on the CCP website. Applications are submitted through the CCP’s online portal or in hard copy at the CCP’s Islamabad offices.

The following checklist covers the core documents required for a complete filing. Incomplete filings will not start the statutory review clock, so ensuring completeness before submission is essential.

• Completed notification form. All sections fully completed, signed by an authorised representative of the notifying party.
• Transaction agreements. Executed or substantially final copies of the share-purchase agreement, asset-purchase agreement, merger protocol, joint-venture agreement or equivalent.
• Corporate structure charts. Pre-transaction and post-transaction diagrams showing the acquirer group, target group and all associated undertakings.
• Audited financial statements. Most recent three years of audited accounts for both the acquirer group and the target group (Pakistan operations).
• Turnover schedules. Breakdown of net turnover in Pakistan by product line or service category for the preceding financial year.
• Market-share analysis. Estimates of the parties’ market shares in each relevant product and geographic market in Pakistan, with sources identified.
• Shareholder registers. Current registers showing beneficial ownership and voting-rights percentages for both parties.
• Board resolutions. Certified copies of board resolutions authorising the transaction and the filing.
• Power of attorney. If filed by external counsel, a duly executed power of attorney authorising the representative to act on behalf of the notifying party.
• Filing fee payment evidence. Bank draft, pay order or online payment confirmation for the applicable CCP filing fee.
• Translations. Certified English or Urdu translations of any documents originally in another language.

Compliance Risks, Gun-Jumping, Remedies and Penalties

Implementing a notifiable transaction before obtaining CCP clearance constitutes gun-jumping under the Competition Act, 2010. Gun-jumping is a serious offence that can attract penalties regardless of whether the merger itself would have been cleared on the merits.

The CCP’s enforcement toolkit for gun-jumping and anti-competitive mergers includes:

• Financial penalties. The CCP may impose fines of up to PKR 75 million or an amount calculated as a percentage of the undertaking’s turnover, depending on the severity of the violation.
• Unwinding orders. The CCP has the statutory power to order the reversal of a completed transaction, requiring divestiture of the acquired business or shares.
• Behavioural remedies. Where structural remedies are disproportionate, the CCP may impose behavioural commitments, such as maintaining separate pricing, preserving supply relationships, or ring-fencing competitively sensitive information.
• Structural remedies. In Phase II cases, the CCP may require the divestiture of specific business units, brands or assets as a condition of clearance.

Practical mitigation steps for deal teams include:

• Long-stop date clause. Include a condition precedent in the transaction agreement requiring CCP clearance before completion, with a long-stop date that accommodates a potential Phase II review.
• Information-barrier protocol. Between signing and clearance, maintain strict information barriers to prevent the exchange of competitively sensitive data between the parties.
• Separate commercial conduct. The target must continue to operate independently, setting its own prices, negotiating its own contracts and making its own strategic decisions, until clearance is received.
• Filing-readiness workstream. Engage local competition counsel early to prepare the filing pack in parallel with due diligence, so that the notification can be submitted promptly after signing.

Conclusion, Immediate Next Steps for Deal Teams

If your transaction involves a target or acquirer group with assets or turnover in Pakistan that may cross the prescribed Pakistan merger control thresholds, the deal cannot close without CCP clearance. The decision flow is straightforward: aggregate the group figures, compare them against the current threshold levels, and if either test is met, pause commercial steps and prepare the filing pack. Engaging experienced Pakistan M&A counsel early, ideally during the due-diligence phase, will help avoid unnecessary delays, ensure completeness of the notification and minimise the risk of a Phase II review or gun-jumping exposure.

Sources

1. Competition Commission of Pakistan, Mergers, Acquisition & Joint Ventures
2. Competition (Merger Control) Regulations, 2016 (CCP PDF)
3. Lex Mundi, Pakistan Merger Notification Guide
4. Lexology, Pakistan Merger Control Overview
5. Mergerfilers, Pakistan Guide
6. International Competition Network, Pakistan Filing Template
7. LexisNexis, Pakistan Merger Control Guidance