An acquisition in Pakistan can proceed by share purchase, asset purchase, or a court-sanctioned scheme of arrangement, and the route chosen shapes the entire process that follows.
Due diligence
Legal due diligence examines corporate records, material contracts, litigation history, regulatory compliance and encumbrances on assets. Its purpose is to price risk correctly and to identify what must be fixed before completion, not merely to confirm what the seller has already claimed.
Transaction structure
A share purchase transfers the company as a whole, including its liabilities. An asset purchase allows the buyer to select which assets and liabilities to take on, generally at the cost of a more complex transfer process.
A scheme of arrangement, sanctioned by the court, is used for more complex restructurings and mergers, and involves a formal process under the Companies Act 2017.
SECP’s role
The Securities and Exchange Commission of Pakistan regulates company mergers and, for listed companies, transactions also engage stock exchange and takeover regulations. Where the target operates in a regulated sector, the relevant sectoral regulator’s approval may also be required.
What to do next
Bring the target company’s constitutional documents, recent financial statements, and a description of the proposed structure, so the correct route and approvals can be identified early.