Practice Area
Mergers & Acquisitions
We structure, negotiate, and close acquisitions, mergers, and disposals for buyers, sellers, and founders in Pakistan — share deals, asset deals, and court-sanctioned schemes. This is deal work for people who have to live with the deal afterwards.
An acquisition in Pakistan is a sequence of gates. Board and shareholder approvals run under the Companies Act 2017. Merger clearance from the Competition Commission of Pakistan runs under the Competition Act 2010 where the thresholds are met. State Bank permissions govern any money that crosses the border. Stamping and registration sit with the provinces where the assets do. A deal that closes in the wrong order can be undone in the right court, so we plan the sequence before we draft the first document.
The first decision on every deal is structural, and it is worth more than most of the negotiation that follows. A share deal moves the company whole — its contracts, its licences, its history, and its skeletons. An asset deal moves only what is listed, at the price of consents, employee arrangements, and provincial duty on every conveyance. A court- or SECP-sanctioned scheme under the Companies Act 2017 binds everyone, including the shareholder who never signs. We put the three structures side by side, with the tax and duty numbers attached, before anyone falls in love with one of them.
Merger control deserves more respect than it usually gets from first-time sellers. The thresholds in the Competition (Merger Control) Regulations 2016 are set low enough that mid-market deals are routinely notifiable, and the share-acquisition trigger reaches minority stakes. Clearance in a clean Phase I review is fast; discovering the requirement after signing is not. We run the threshold analysis at term-sheet stage as a matter of course, and where notification is required we treat the CCP timetable as the deal's timetable.
We negotiate on the assumption that the contract will one day be read by a judge who was not in the room. Conditions are drafted so their satisfaction can be evidenced. Indemnities are drafted so quantum can be computed. Where a warranty rests on a fact, we ask for the document that proves the fact — at diligence, not at trial. And because this firm also runs the disputes that follow deals — warranty claims, earn-out fights, enforcement — the drafting reflects what actually goes wrong, not what precedent banks assume.
The positions on this page are stated as of mid-2026. Merger thresholds, takeover triggers, tax rates, and exchange-control practice all change, and we confirm the current position at the outset of every mandate.
When Businesses Need This
The moments this practice exists for.
- 01You have received an offer for your company and need to understand the process before you answer it.
- 02You are buying a competitor, a supplier, or a team, and the deal needs to be structured, papered, and closed.
- 03A foreign buyer wants your shares, and the purchase price has to move through the State Bank of Pakistan's exchange-control regime.
- 04Your group has accumulated too many companies and you want them merged into one clean structure before an audit, a fundraise, or a sale.
- 05The transaction may cross the Competition Commission of Pakistan's merger-control thresholds and you need to know before you sign, not after.
- 06You are selling a division — people, contracts, equipment, premises — rather than the company itself.
- 07A signed deal is stuck between signing and closing, and the conditions are drifting.
How It Works
The process, stage by stage.
1
Structure and term sheet
We settle the shape of the deal before anyone drafts at length: share sale or asset sale, one closing or several, cash now or earn-out later. The term sheet records the commercial bargain and marks what is binding — exclusivity, confidentiality, costs — and what is not. Tax, exchange control, and merger control are checked at this stage, because they decide structure and cannot be bolted on later.
2
Due diligence
Diligence in Pakistan turns on title, tax, litigation, and licences. We examine the corporate record at the SECP, land against the revenue record, tax positions under the Income Tax Ordinance 2001, pending cases against the target and its sponsors, and the permits the business actually runs on. The output is not a data dump; it is a short list of issues, each priced as a condition, an indemnity, or a price adjustment.
3
Transaction documents
We draft and negotiate the share purchase or business transfer agreement, disclosure letter, shareholders' or transition arrangements, and the ancillary transfer instruments. Conditions are drafted so their satisfaction can be evidenced. Indemnities are drafted so quantum can be computed. Every clause is written on the assumption that a judge who was not in the room may one day read it.
4
Approvals and clearances
Board and shareholder approvals under the Companies Act 2017, CCP clearance under the Competition Act 2010 where the thresholds are met, State Bank routing where a party is non-resident, and any sectoral consents the target's licences require. We sequence the gates and run them in parallel where the law allows, because the order of approvals is often the difference between a six-week closing and a six-month one.
5
Closing
Closing is choreography: payment flows confirmed through banking channels, transfer deeds executed and stamped, share certificates or CDC book entries moved, board seats changed, and filings made with the registrar. We run closings from a checklist agreed with the other side in advance, so that on the day there are signatures, not negotiations.
6
Post-closing
Completion accounts or locked-box true-ups, earn-out mechanics, statutory filings, and the unglamorous work of actually transferring what was sold — mutations, licence endorsements, employee onboarding, charge releases. Where a warranty claim or price dispute follows, the team that papered the deal handles it.
The Legal Framework
The law this work runs on.
- Companies Act, 2017
- The corporate spine of every deal: board and members' approvals, transfer and registration of shares, filings with the registrar, and schemes of compromise, arrangement, and amalgamation under sections 279 to 283, sanctioned by the SECP or the Company Bench of the High Court as the Act allocates jurisdiction between them.
- Competition Act, 2010
- Section 11 requires pre-merger clearance from the Competition Commission of Pakistan for transactions that meet the notification thresholds. A notifiable deal should not close without clearance; the CCP can review, condition, or unwind one that does.
- Competition (Merger Control) Regulations, 2016
- These regulations set the notification thresholds by reference to asset value, turnover, transaction size, and acquisitions of ten per cent or more of voting shares. The threshold figures are amended from time to time and must be checked against the current text at signing [CURRENT THRESHOLD FIGURES — TO BE VERIFIED BY REVIEWING LAWYER].
- Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002
- For listed targets, this Ordinance and the SECP's takeover regulations govern disclosure of acquisitions, mandatory offer triggers, and the conduct of public offers. Private-company deals are outside it; listed-company deals are built around it.
- Foreign Exchange Regulation Act, 1947
- Where a buyer or seller is non-resident, the State Bank of Pakistan's exchange-control regime under this Act and the Foreign Exchange Manual governs how shares are transferred and how money enters and leaves Pakistan through authorized dealers. Repatriation planning belongs at term-sheet stage.
- Income Tax Ordinance, 2001
- Capital gains, withholding obligations, and the reliefs available for qualifying group reorganizations all sit here. The tax cost of a share deal and an asset deal can differ sharply, and the comparison should be run before the structure is chosen.
- Stamp Act, 1899
- Stamp duty is a provincial matter and falls on the instruments of transfer — heavily on conveyances of immovable property in an asset deal, more lightly on share transfers. In Punjab, e-stamping applies. Duty is a real cost line, not a rounding error.
- Registration Act, 1908
- Transfers of immovable property in an asset deal must be registered with the local sub-registrar; an unregistered conveyance is a dispute waiting for a plaintiff. Registration timelines and local practice vary by district.
- Central Depositories Act, 1997
- Shares held in book-entry form move through the Central Depository Company rather than by physical transfer deed. The mechanics of a CDC transfer differ from a certificated one, and the closing checklist must say which applies.
Statutory references are stated as of the page’s as-of date and flagged where verification is pending; the law moves, and the current position should be confirmed before relying on it.
Common Mistakes
The errors we see most — and their price.
- Signing a letter of intent that is more binding than anyone intended, and discovering it during the dispute.
- Assuming the deal is too small for CCP notification without checking the thresholds — the share-acquisition trigger catches minority purchases that feel modest.
- Treating due diligence as a formality and finding the litigation, the tax exposure, or the defective land title after the price is fixed.
- Structuring an asset deal without reading the contracts being bought — most commercial contracts do not assign without the counterparty's consent.
- Having no employee plan on an asset sale — Pakistani law has no general automatic-transfer regime, so people move by consent or not at all.
- Underestimating stamp duty and registration costs on asset transfers, which can swing the share-versus-asset comparison by itself.
- Wiring cross-border consideration outside the banking channels the Foreign Exchange Manual prescribes, and paying for the shortcut at repatriation.
- Negotiating warranties without disclosure discipline or indemnity mechanics, so that the protection reads well and computes to nothing.
Representative Scenarios
The shape of the work.
Illustrative scenarios, not case reports — composites drawn to show how matters of this kind run.
- —Illustrative: a Lahore manufacturer sells a controlling stake to a strategic buyer; the deal crosses the CCP thresholds, clearance is obtained in Phase I, and closing is staged around it.Illustrative
- —Illustrative: the founders of a software company sell a majority to a foreign acquirer; the share transfer and price flow are routed through an authorized dealer under the State Bank's regime, with repatriation of future dividends planned in the documents.Illustrative
- —Illustrative: a family group amalgamates five operating companies into one under a scheme sanctioned under the Companies Act 2017, cleaning the structure ahead of an external investment.Illustrative
- —Illustrative: diligence on an acquisition surfaces a pending revenue dispute; the price is restructured with a holdback and a specific indemnity rather than the deal collapsing.Illustrative
Questions, Answered
What clients ask about mergers & acquisitions.
Neither, in the abstract. A share deal transfers the company with everything in it, known and unknown, and is usually simpler to execute; an asset deal lets a buyer pick what it takes but drags consents, employee arrangements, stamp duty, and registration behind it. The right answer falls out of the target's liabilities, the contracts, the tax comparison, and the property involved — which is why we run that analysis before the term sheet, not after.
If the transaction meets the thresholds in the Competition (Merger Control) Regulations 2016 — set by reference to assets, turnover, transaction value, or acquisition of ten per cent or more of voting shares — section 11 of the Competition Act 2010 requires pre-merger clearance. As of mid-2026 the review runs in phases: a Phase I review of thirty days, and a Phase II review of up to ninety days where competition concerns need deeper study. Most clean deals clear in Phase I; the point is to know your phase before you promise a closing date.
A straightforward private share deal with no regulatory gates can sign and close in six to ten weeks from an agreed term sheet. Add CCP clearance, State Bank routing, a court-sanctioned scheme, or sectoral consents, and the timetable is set by the slowest gate, not the parties' enthusiasm. We give clients a gate map at the start so the timetable is a plan rather than a hope.
In most sectors, yes, as of mid-2026 — foreign ownership is generally permitted, with the shares transferred and paid for through banking channels under the State Bank's Foreign Exchange Manual. A small number of sectors carry caps or special approvals [SECTOR-SPECIFIC RESTRICTIONS — TO BE VERIFIED BY REVIEWING LAWYER]. The practical work is procedural: valuation support, the authorized dealer's requirements, and the paper trail that protects future repatriation.
A scheme under sections 279 to 283 of the Companies Act 2017 is a court- or SECP-sanctioned restructuring: it can merge companies, split them, or rearrange capital, and once sanctioned it binds all members and creditors, including dissenters. It is the tool for group amalgamations and for transactions a simple contract cannot deliver. It takes longer than a bilateral sale — meetings must be convened and the sanctioning forum satisfied — so it earns its place only where its binding effect is needed.
Capital gains tax under the Income Tax Ordinance 2001 is the headline item, with the rate depending on the seller, the holding period, and whether the shares are listed; withholding obligations can apply to the buyer's payment. Asset deals raise separate questions — depreciation recapture, sales tax on certain transfers, and provincial stamp duty. Rates change with annual Finance Acts, so we confirm the current position at structuring, and the numbers here are stated as of mid-2026.
On a share deal, nothing changes legally — the employer is the same company under new ownership. On an asset deal, Pakistani law has no general automatic-transfer regime as of mid-2026: employees move by consent, usually by settlement of accrued dues and fresh employment with the buyer, or by tripartite arrangement. Getting this wrong produces labour claims against both sides, so the employee plan belongs in the transaction documents, not in the integration memo.
That is a dispute we plan for while drafting: warranties tied to disclosed documents, indemnities with computation mechanics, and a dispute-resolution clause chosen deliberately — arbitration or courts, seat and forum picked with enforcement in mind. When a claim comes, the firm's dispute resolution practice prosecutes or defends it with the deal team alongside. The drafting is the first half of the litigation strategy.
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Prepared by The First Counsel · As of 2026-07-12 · Pending professional review — statements flagged in the text are being verified
This publication is provided for general information only. It is not legal advice, and neither reading it nor corresponding with the firm about it creates a lawyer–client relationship. The position stated must be verified against current law before it is relied upon.