Botash's merger approved

| Friday March 5, 2010 00:00

Initially, the Competition Commission recommended that the Tribunal prohibit the merger, owing to concerns that the change from a duopoly to a monopoly might result in price increases.

Currently, CAH supplies chemical grade salt through its subsidiary, Walvis Bay Salt Holdings. The other alternative supplier of chemical grade salt in Southern Africa is Botash, which produces chemical grade salt as a by-product of ash. However, the Commission decided that by implementing certain conditions,  it could remedy the competition concerns that arose from merger and ultimately changed its mind regarding the merger. Subject to the merger, Botash would supply any inland South Africa-based purchaser of unbagged and railed chemical grade salt for use in South Africa.

Premerger Sasol was the only inland customer getting its chemical salt requirements from Botash, however, Sasol had now concluded a long-term supply agreement with the merging parties. The effects of that agreement on competition need to be considered, said the Commission.

CAH, which is controlled by Investec, plans to acquire a 50% shareholding in Botash from Anglo American, De Beers Botswana, AECI and FirstRand Bank, Nedbank, and Standard Bank.

At the conclusion of the transaction, Botash would be jointly owned by the government of Botswana and CAH.