NaCC approves mergers worth N$79.45b
The Namibian Competition Commission (NaCC) has handled about 91 mergers between Namibian and foreign firms worth N$79,450,341,888.23, The Villager understands.
3% of the cases handled in the 2014/15 financial year were approved with conditions, with the reason of two of the mergers being subject to employment, while 97% were approved without conditions. None were prohibited.
In the period under review, the number of mergers investigated and adjudicated increased by 46% to 91 mergers from the total number investigated in the 2013/14 financial year, which were 49 mergers.
To date, the Commission has received about 380 merger notifications, and has successfully investigated and adjudicated (determined) on about 358 of these mergers.
The two mergers approved with conditions were the proposed acquisition of Fides Bank Limited by Trustco Holdings Limited, and the proposed acquisition of AngloGold Ashanti (Namibia) Ltd by Guinea Fowl Investments (Pty) Ltd (“QKR”).
Vitalis Ndalikokule is the Director of Mergers and Acquisitions at the NaCC, and explained that in instances of foreign companies having subsidiaries in Namibia, most of the transactions’ values (purchase consideration) are based on the holding company’s valuation.
He noted that a merger is notifiable to the Commission if the value of the proposed merger is above the specified notification threshold of N$20 million for the combined annual turnover and assets of the merging undertakings in Namibia, or N$10 million for the annual turnover or assets of the target undertaking in Namibia.
“However, the Commission may require parties to a merger which falls below the specified thresholds to notify the Commission if such a merger is likely to raise any competition or public interest concerns,” he stressed.
Ndalikokule said if any proposed merger is likely to ‘kill’ local firms, or in other words harm competition in the Namibian market, the Commission is likely to approve such a merger, subject to certain conditions aimed at addressing the negative impacts of the merger.
“If in the opinion of the Commission and based on the evidence gathered during investigations there are no conditions which could mitigate the harm likely to be caused by the merger, the last resort available to the Commission is to prohibit such a merger,” Ndalikokule reiterated.
The NaCC considers whether a merger is likely to substantially prevent or lessen competition, which results in any party strengthening a dominant position in a market or acquiring a dominant position; and whether a merger can or cannot be justified on public interest grounds, which may include employment, small business development or consumer protection.
Ndalikokule said the main function of the Commission’s Mergers and Acquisitions’ Division is the enforcement of the provisions of Chapter 4 of the Act as the investigative arm on merger regulation.
“The division investigates and assesses whether a merger is likely to raise any competition or public interest concerns, and submits an investigative report and its recommendations to the Board of Commissioners, which is the adjudicative arm on merger regulation for the Commission. The division further provides advisory opinions, monitors compliance with conditions imposed on mergers, and investigates contraventions of Chapter 4,” he continued.
Ndalikokule stressed that section 47(1), read with section 47(6) of the Act provides that the Commission may either grant or decline the approval of a merger’s implementation, or approve a merger with conditions aimed at addressing competition or public interest concerns which are likely to result from the proposed merger.
“Section 47(1) also states that the merger is approved at an extent to which the proposed merger would be likely to result in a benefit to the public, which would outweigh any detriment which would be likely to result from any undertaking, including an undertaking not be involved as a party in the proposed merger, acquiring a dominant position in a market or strengthening a dominant position in a market, and the extent to which the proposed merger would be likely to affect a particular industrial sector or region,” he said.