The wholesale and retail sector has dominated mergers and acquisitions in the past year, the latest Competition Authority (CA) annual report shows.
During the 2016-2017 financial year, a total of 52 mergers were handled and out of this figure, the wholesale and retail sector recorded the highest number at 13 cases compared to 12 in the previous year.
The other sector that had a significant record on merger notifications is the transportation and logistics sector, which recorded seven cases as compared to zero in 2016.
The data enclosed in the report shows that from 2012 to 2017, a total of 179 mergers were handled by the authority with the wholesale and retail sector topping at 40.
CA director of mergers and monopolies, Magdeline Gabaraane said the 52 mergers handled by the authority in the year under review are an increase of 58% from the 33 mergers handled in the previous year.
She said out of the 52 mergers finalised, 44 were classified as simple, eight were classified as complex. “Two notified mergers were abandoned whilst assessment was ongoing,” she said. Gabaraane explained that the abandonment for one of the transactions was due to the fact that the relevant market of retail in clothing was reserved for locals and an exception for the parties to operate in the market was not granted by the ministry, whilst the other transaction was abandoned due to changes in
During the financial year, 45 mergers were approved without conditions, five with conditions and two were prohibited.
The prohibited mergers involved Transport Holdings and 4MS Group, as well as Universal House and Mmegi Investment Holdings.
It was the authority’s view that, if the two mergers were approved, they would have distorted competition in line haul transportation consolidation transportation services, and the provision of commercial radio broadcasting services.
In addition, Gabaraane cited figures published by Statistics Botswana that she said recently showed that from 1.7% negative growth in 2015, the economy registered positive growth last year mainly due to significant contributions in sectors such as trade, hotels and restaurants, which recorded an increase in value addition of 13.5%.
“In the period 2012-2013 to 2014-2015, the mining sector had the highest number of transactions handled,” Gabaraane said.
However, she noted that this has since seen a decline in the last two financial years, adding that the decline in the number of transactions in the mining sector could be attributed to the fact that the sector has been experiencing challenges in the last few years, as indicated by a sluggish recovery in the mining sector, dampened further by the closure of BCL and Tati Nickel mines in October 2016.