CTC sets tough conditions for Capri deal
THE Competition and Tariff Commission (CTC) has directed Zimbabwe Stock Exchange-listed conglomerate, Innscor Africa Limited, to divest from Capri within six months for its deal with Annunaki Investments to be approved.
“The commission reviewed its decision subject to the condition of divesture. Considering this, the final decision of the commission was that: The acquisition by Annunaki Investments (Pvt) Ltd of an indirect interest in Capri be approved on condition that Innscor Africa Limited completely divests from Capri within six months of receiving the commission’s decision; the penalty paid of $848 464,48 for consummating the merger without approval of the commission, be maintained,” CTC said in its latest newsletter.
In February 2020, CTC received a notification of a merger involving Annunaki Investments and Innscor’s appliance manufacturing unit, Capri.
The merger was an acquisition of a 25% stake in Capri by Annunaki. Annunaki is an investment vehicle, wholly-owned by SSCG Africa Holdings. It controls Deilennar Investment, a commercial refrigeration leasing company; Mafuro Farming, a dairy farming business; and Aqua Aura, an agriculture centre-pivot distribution business.
SSCG is incorporated in Mauritius and Zimbabwe.
It has investments in fast-moving consumer goods, tourism, human resources recruitment, agriculture, mining, packaging, financial services, equipment leasing, restaurants and clothing industries in Zimbabwe.
Capri manufactures household refrigerators and is a distributor of electrical appliances.
CTC said the proposed transaction was classified as of a conglomerate in nature. Conglomerate mergers, by definition, do not pose serious competition concerns, however, in this instance competition concerns were in the indirect market of fund management because the merger had the effect of neutralising competition between two major competitors through indirectly uniting them.
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