CFTC endorses two proposed acquisitions
The Competition and Fair Trading Commission (CFTC) has finally endorsed two cases of acquisitions which related to allegations or likely violations of the Competition and Fair Trading Act.
The endorsed proposed acquisitions include a 100 percent shareholding in Makandi Tea and Coffee estates and Kawalazi Estate Company Limited by Dhunseri Petrochem and Tea Pte Limited and the 49 percent shareholding by Santan Limited in Niko Africa Investment Limited currently held by Nico Holdings Limited.
CFTC chairperson Felix Jumbe told Business News last week that the endorsement of the two acquisitions follows a meeting by the commission on October 2 this year to fulfill its statutory mandate of regulating operations of markets and safeguarding consumer welfare in Malawi.
He said on the basis of information provided by all parties and the commission’s investigations on the proposed acquisition of Makandi and Kawalazi estates, the commission determined that the acquisition will not alter the market structure of tea, coffee and macademia nuts in Malawi.
He said it was concluded during the meeting that the acquisition of two estates by Dhunseri would unlikely result into substantial lessening of competition in Malawi.
The commission expressed concern at the tendency by some investors who flout the country’s laws and regulations relating to repatriation of export earnings and employment.
Jumbe assured that CFTC has resolved to work with other relevant regulatory bodies in the country in monitoring operations of the acquired companies to ensure that they comply with the country’s laws and regulations.
Commenting on the proposed acquisition by Santam Limited of 49 percent shareholding in Niko Africa Investment Limited, Jumbe said such an acquisition will not change the market structure for general insurance business in Malawi ‘as the players in the market will remain the same’.
When asked on what would become of Nico General Insurance Company Limited whose ownership is directly affected by the transaction, he said the company will remain an effective competitor on the market.
The CFTC chairperson expressed hope that such a transaction should eventually culminate into strengthening of local capacity through skills transfer, creation of better products and improved innovation in delivery of goods and services.
