The Competition and Tariff Commission (CTC) received five requests for merger approval in the first quarter of this year, Business Times can report.
The proposed mergers, which are contained in the latest CTC report, include a proposal by Sovereign Wealth Fund to acquire Dayriver Corporation Limited and the acquisition of Industrial Commodities Holdings by Kali Union Verwal Tunsgesilischaft.
The Commission also received a request from Shepco Industrial Supplies Private Limited to acquire Haggie Rand Zimbabwe while Investors in Africa-Takura made an application to acquire Davis Granite Private. Aluminium Metal Industries also requested to acquire RD Architectural Aluminium.
Meanwhile CTC approved the acquisition of Shanksville Farming (Pvt) Ltd by Annunaki
Investments as well as the acquisition of Marsh Zimbabwe Holdings by the country’s largest financial services group, Old Mutual Limited.
“Given the analysis and the consideration that the merged entities will continue to operate separately; and that the merger was not substantially lessening competition, the Commission approved the merger without conditions,” CTC said in a first quarter bulletin.
The Commission said though both merging parties offer pension administration service, their contribution to the total fund administration services offered in the market is less than 6% and its contribution towards the business revenue and activities is insignificant.
CTC classified the transaction as a vertical merger because there is a customer-supplier relationship between Old Mutual and Marsh.
“Competition analysis considered theories of harm that affect vertical mergers namely input and customer foreclosure. Foreclosure in this case was analysed in line with the insurance broking and short-term insurance services only,” CTC said.
“Input foreclosure arises when the merged entity restricts access to the products or services that it would have otherwise supplied if the merger had not taken place. The risk for competition relates to the effects from increases in input costs for rivals on the downstream market, especially if the merging firm has market power on the upstream market.”