CA gives nod to Lansmore takeover

BRIAN BENZA

The London Stock Exchange (LSE) listed but Africa focused Lonrho owns Botswana's newest business five-star hotel, Lansmore situated at Masa Centre in the new CBD.The two companies agreed to the buyout two months ago, which would give the Swedish firm control of Lonrho's diversified business empire. Lonrho, which also has a secondary listing on AltX in Johannesburg, has business interests across 18 countries ranging from agribusiness, infrastructure and support services, hotels, as well as the oil and gas sectors. It is also the majority owner of African low-cost airline Fastjet, and owns seafood producer Oceanfresh Seafoods.

In a statement, the CA said it has unconditionally approved the proposed transaction on the grounds that the analysis of the facts of the merger assessment showed that there were no substantial competition concerns that arise in the hotel facilities market in Botswana.'The proposed transaction is not likely to result in substantial lessening of competition, nor endanger the continuity of service, due to the absence of geographical overlap between the activities of the merging parties in Botswana. The merged entity does not possess any market dominance and consequently no threat of abuse of dominant market position is anticipated,' said the CA.

However, the CA said pursuant to provisions within the Competition Act, this approval does not override or negate any other mandatory statutory approvals or processes that any of the parties to this merger must comply with under the laws of Botswana. The two companies will need to seek regulatory approval in the other 17 countries that Lonrho has operations in. Lansmore Hotel is Lonrho's sixth in Africa - two in the DRC, and three in Mozambique, Zimbabwe and Gabon.It is however unclear if the new owners will sell the hotel if the deal goes through.

In a statement, FS Africa said on completion, it would 'undertake a strategic review of Lonrho's business and operations', implying that some assets could be sold. FS Africa said it intends to enter into discussions with senior management of Lonrho regarding their role and potential continuing involvement in the ongoing business of Lonrho.  'There are no agreements or arrangements between FS Africa and senior management of Lonrho regarding their continuing involvement at this time and the transaction is not conditional on reaching agreement with senior management. Upon completion of the transaction, FS Africa will undertake a strategic review of Lonrho's business and operations and, until that review is completed, FS Africa cannot be certain what, if any, repercussions there will be on employment of the management and employees of Lonrho, the location of Lonrho's places of business or any redeployment of Lonrho's fixed assets,' said the Swedish company.Currently FS Africa holds approximately 19.97 percent of Lonrho's issued share capital.