Introduction
On October 2, 2025, Pakistan’s Competition Commission (CCP) approved Systems Limited’s acquisition of SAA Services (Pvt) Ltd from British American Tobacco International Holdings (UK). This strategic move consolidates control over captive IT services previously serving only the BAT group and signals a shift in Pakistan’s IT and BPO landscape.
The approval came under Phase I of CCP’s merger review framework as prescribed by the Competition Act, 2010. The CCP found no overlapping business lines with Systems in the domestic BPO space and determined that the deal would not distort competition.
This post analyzes the deal’s rationale, potential risks, benefits, and broader implications for Pakistan’s technology sector.
Background and Transaction Details
SAA Services is a captive services arm of BAT, providing internal IT and IT-enabled services (HR, finance, procurement, digital tech) exclusively for BAT group entities. It does not serve external clients either domestically or abroad.
Systems Limited is a major Pakistani firm active in software development, BPO, cloud services, and digital infrastructure. On July 29, 2025, its board approved acquiring BAT SAA Services via a share purchase agreement. The deal was contingent on regulatory approvals, which the CCP has now granted.
Given the limited overlap between the two entities in Pakistan’s BPO market, the CCP concluded the transaction does not raise competition concerns. he acquisition was authorized under Section 31(1)(d)(i) of the Competition Act, 2010.
Key Drivers and Strategic Rationale
Access to Global Expertise & Best Practices
By acquiring SAA Services, Systems gains access to the BAT group’s internal operational processes, standards, and global service protocols. This may enable improvements in service delivery, quality assurance, and process maturity.
Strengthening Capabilities and Scale
Systems can integrate SAA’s internal IT functions into its broader service portfolio, potentially creating synergies in areas like digital transformation, shared services, and operational efficiency.
Alignment with National Objectives
The CCP statement pointed out alignment with Pakistan’s goals for job creation, technology transfer, and digital economy growth.
Avoiding Market Dominance Risk
Because SAA’s operations are internal to BAT and do not compete in open markets, the risk of market consolidation or abuse is minimal. The CCP’s review affirmed that the acquisition does not strengthen a dominant market position.
Risks, Challenges & Considerations
Integration Challenges
Merging processes, corporate cultures, and technology stacks between Systems and SAA Services may pose operational challenges.
Overreliance on Internal Client Base
Since SAA Services historically serves only BAT internal units, Systems must ensure it does not overly depend on a limited client base without diversifying.
Regulatory Scrutiny & Precedents
Although CCP approved this under Phase I, future acquisitions in the IT/BPO sector may face stricter scrutiny, especially if overlaps or dominance risks emerge.
Market Perception & Talent Retention
Clients and skilled employees might question the motives — will Systems maintain service quality? Ensuring transparent transition and retention incentives will be critical.
Implications for Pakistan’s IT / BPO Sector
- Consolidation in Internal Services
We may see more IT firms acquiring captive service wings of multinational corporates as internal processes are brought in-house. - Expansion of Global Service Offerings
With enhanced capacity, Systems could pitch these integrated capabilities to external clients, both local and international. - Incentive for Tech Innovation
Access to more mature internal systems may spur development of proprietary tools, automation, and AI-led service models. - Greater Investor Confidence
Successful execution could signal maturity in Pakistan’s tech sector, attracting more foreign and domestic investment.
Numbers & Market Context
- The IT & telecom exports from Pakistan grew by 23.7% in FY25, reaching USD 2.825 billion (ProPakistani).
- Systems Limited is listed on the Pakistan Stock Exchange, and similar acquisitions may impact its valuation metrics and investor expectations.
These figures highlight the underlying momentum in Pakistan’s digital services sector, which this acquisition aims to capitalize on.
FAQs
Q: Does this deal reduce competition in IT/BPO in Pakistan?
No — the CCP determined there is no overlap or risk of dominance, because SAA Services serves only BAT internally.
Q: What regulatory framework enabled this approval?
The acquisition was reviewed under Phase I of the CCP’s merger assessment process, in line with the Competition Act, 2010.
Q: What benefits can be expected for Systems?
Better service efficiency, access to global best practices, potential for external client growth, and alignment with national tech goals.
Q: Are there conditions linked to the approval?
The public statements do not mention binding conditions, but CCP’s assessment ensures that no dominant position is created under Section 31(1)(d)(i).
Conclusion
The CCP’s approval of Systems Limited’s acquisition of BAT SAA Services is a watershed moment in Pakistan’s IT sector. It reflects a strategic move to internal service consolidation combined with the ambition to elevate service standards and scale.
By absorbing a captive service provider, Systems has the opportunity to leverage global processes, foster innovation, and strengthen its position in both local and international markets. However, the real test lies in integration, diversification, and continued performance.
If managed well, this acquisition could mark a turning point for how Pakistani tech firms approach scale, competitiveness, and innovation in the digital economy.
