Amalgamation of Mobilink and Warid

Amalgamation of Mobilink and Warid Case Laws Competition Corporate Law Knowledge – Corporate Law Merger & Acquisition Solutions - Corporate Law Telecom TMT The Competition Commission of Pakistan has decided phase II review regarding amalgamation of Mobilink and Warid on 18 March 2016 in Merger Case No. 773 of 2015.

1. The Competition Commission of Pakistan (the “Commission”) is mandated under the Competition Act 2010′ (the “Act”) and the Rules and Regulations made thereunder, to ensure free competition in all spheres of commercial and economic activity to enhance economic efficiency and protect consumers from, inter alia, anti-competitive behaviour, abuse of dominance, deceptive marketing practices and mergers which substantially lessen competition by creating or strengthening a dominant position in the relevant market.

2. An order concluding the phase I review was passed by the Commission on 22 January 2016 (“Phase I Order”), thereby initiating phase II review in the instant matter (“Phase II Review”).

3. This order concludes the Phase II Review of the merger application in the matter of the proposed acquisition of Warid Telecom Private Limited by, and amalgamation into, Pakistan Mobile Communications Limited (the “Order”). The Order has been passed after giving opportunities of hearing to the undertakings concerned, and hearing other relevant stakeholders, including the sector regulator i.e. Pakistan Telecommunication Authority (the “PTA”).

4. The Commission appreciates the team representing the matter on behalf of Warid, led by the senior counsel Ms. Rahat Kaunain Hassan and on behalf of Mobilink, by the senior counsel Mr. Khalid Ibrahim, and Mr. A Hussain Suliman, CSO, who explained and argued the Transaction ably and provided thorough assistance to the Commission in the matter.

5. On 17 December 2015, the Commission received a pre-merger application (the “Application”) jointly submitted by (i) International Wireless Communications Pakistan (“IWPCL”), (ii) Pakistan Mobile Communications Limited (“Mobilink”), (iii) Warid Telecom Pakistan LLC (“WTPL”), and (iv) Bank Alfalah Limited (“Bank Alfalah”) (collectively referred to as the “Notifying Parties”), notifying and seeking approval of the Commission to acquire [100]% shares of Warid Telecom (Private) Limited (“Warid”) by Mobilink, (collectively, “MergeCo”) by way of share swap agreement. The Application has been submitted in accordance with Section 11 of the Act, and the Competition (Merger Control) Regulations, 2007 (the “Merger Regulations”).

6. The Notifying Parties were invited to give a presentation explaining the transaction to the commission on 31 December, 2015. On the basis of the information before it, the commission carried out a preliminary assessment, and issued the Phase I Order, wherein it was determined that the proposed transaction is likely to raised significant competition concerns which required a more detailed assessment during the Phase II Review.

7. In light of their connection to the matter, Telenor Pakistan Private Limited (“Telenor Pakistan”) and Telenor ASA, Norway (“Telenor ASA”) were made necessary parties to the proceedings. An application requesting their participation in the review proceedings was also received from these parties on 22 January, 2016.

8. The Commission convened two hearings in the matter on 12 February, 2016 and 09 March, 2016. The hearings were attended by the representatives of the Notifying Parties, MergeCo, Telenor Pakistan and the sector regulator, PTA.

9. Mobilink is a public (unquoted) limited company incorporated under the laws of Pakistan. It is a Mobile Network Operator (MNO), principally engaged in providing cellular telecommunication services in Pakistan, Azad Jammu and Kashmir (AJK) and Gilgit Baltistan (GB). It is licensed by the PTA to provide both Global System for Mobile communications (GSM) and Next Generation Mobile Services (NGMS) in Pakistan, GSM and Voice Class Value Added Services (CVAS) in AJK and Northern Areas.

10. [99.22] % of the shares of Mobilink are held by IWCPL, a company incorporated in Malta. The remaining [0.58] % of Mobilink’s shares are held by Telecom Group Mobile Limited (“TGML”), a wholly owned subsidiary of IWCPL. IWCPL is a direct wholly-owned subsidiary of Global Telecom Holding S.A.E (“GTH”), which is a company incorporated in Egypt. GTH is in turn a subsidiary of VimpelCom Limited (“VimpelCom”), a company incorporated in Bermuda and headquartered in Amsterdam, the Netherlands.

11. Mobilink’s direct and indirect subsidiaries include: (i) Business & Communication Systems Private Limited (“BCSPL” direct); (ii) LinkDotNet Pakistan (Private) Limited (“LinkDotNet”, indirect); and (iii) LinkDotNet Telecom Limited (“LinkDotNet Telecom”, direct) (collectively, Mobilink’s subsidiaries).

12. Other associated undertakings are (i) Mobilink Foundation, a not-for-profit entity incorporated as a company limited by guarantee under section 42 of the Companies Ordinance 1984; (ii) Pakistan MNP Database (Guarantee) Limited, a company limited by guarantee; and (iii) Waseela Microfinance Bank Limited (“Waseela”), a company owned and controlled by GTH. The company is licensed to provide microfinance banking services in Pakistan.

13. The value of Mobilink’s total assets as on 31 December, 2014 was PKR [   ] billion, while its turnover was PKR [   ] billion for the same period.

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