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NaCC blocks Pick ÔÇÿN Pay and Ok merger

Tue, 2 April 2013 05:11
by Tirivangani Masawi
Business

The Namibian Competition Commission has declined the proposed mergers between Namibia Rescue Services (Pty) Ltd trading, as E-Med Rescue 24 and International SOS Namibia (Pty) Ltd and Newco; and OK Grocer Keetmanshoop and Model Pick n Pay (Pty) Ltd, respectively.
The submissions were made to the Namibian Competitions Commission (NaCC) on the 29th October 2012 with propositions that E-Med Rescue 24 and International SOS Namibia, transfer all their emergency medical services assets and their emergency services business to Newco as a going concern.
However according to NaCC, the proposed merger had competition irregularities among them the likely decrease competition in the sector in future and that the Commission was also not satisfied that the merger will accrue benefits to the ordinary Namibia.
Meanwhile NaCC has since given a greenlight to the OK Grocer Keetmanshoop and Model Pick n Pay (Pty) Ltd proposed merger.
“The proposed transaction entails a change of ownership and a transfer of assets from OK Grocer Keetmanshoop to Model Pick ‘n Pay and raises no geographical overlap as Model Pick ‘n Pay does not have operations in southern Namibia. Thus, it raises no serious competition concerns that could result in market concentration or abuse of dominance, as Model Pick ‘n Pay is a new entrant into the retail market in the town of Keetmanshoop,” NaCC confirmed through a media statement.
Merging parties submitted that all 58 current employees of OK Grocer Keetmanshoop will be retrenched and requested to re-apply for appointment with Model Pick ‘n Pay.
“The acquirer intend on increasing the current employment rate from 58 to 67 representing an increase of 15% of employees on a post merger basis. However, the current retrenched employees of Jacobus Hendrik Oosthuizen trading as OK Grocer Keetmanshoop are not guaranteed to maintain their positions as they will have to re-apply for their jobs,” NaCC added.
NaCC aadded that, “From the Commission’s point of view, the merged entity should have included the assumption of taking over of employees on a post merger basis. But in this arrangement, employees were to be laid off as at present and the new owner will have an option to hire or not to hire a particular “former employee” of OK Grocer on its own terms and conditions. Commission views this arrangement problematic in terms of its criteria of Section 47(2)(e) of the Act, the extent to which the proposed merger would be likely to affect employment.”