CCP grants exemption to Metro and Thal Limited

The Competition Commission of Pakistan (CCP) on Wednesday issued exemption to a joint venture agreement (JVA) between Metro Cash and Carry International (Metro) and Thal Limited (Thal) under Section 5 of the Competition Act, 2010 (Act). Metro and Thal filed a joint application before CCP for the exemption of JVA from application of Section 4 of the Act. Through the JVA, the Metro and Thal agreed to restructure their respective subsidiaries in Pakistan, namely Metro Cash and Carry Pakistan (MCCP) and Makro-Habib Pakistan Limited (MHPL), respectively by forming two separate entities namely, OpCo and PropCo. OpCo will carry on the business of wholesale cash and carry distribution initially through the existing cash and carry centers; whereas the PropCo will own and manage, the properties owned by MCCP and MHPL. The exemption was sought from the non-compete clause in the JVA that expanded the scope of restraint from the business of the Metro and Thal, “whole sale cash and carry” to include “retail operations”. Therefore, CCP deemed it appropriate to conduct a hearing in the matter. While considering the conditions mentioned in Section 9 of the Act for grant of exemption, the commission observed that JVA will facilitate the growth of the wholesale business as the entities will be able to combine their resources and take advantage of the resulting economies of scale, thereby becoming more competitive and benefiting the consumers.