The Sunday News
Thandeka Matebesi, Business Reporter
THE Competition and Tariff Commission (CTC) is in the process of evaluating competitive effectiveness of mergers and acquisitions it approved over the past nine years.
CTC director Ms Ellen Ruparanganda told Sunday News Business that the Commission had started a survey aimed at determining the competitive impact of mergers and acquisitions it approved since the dollarisation of the country’s economy in 2009.
“The Commission is currently undertaking an Impact Assessment of Merger Determinations from 2009 to 2017. The aim is to assess the socio-economic impact of mergers and acquisitions approved by the Commission between 2009-2017,” she said.
The growing number of mergers over the years have been described by a number of economic analysts as a positive indicator of growing investor sentiment in the economy.
Most of the companies are merging to enjoy the benefits of being big and also to access lines of credit at better and cheaper rates.
This year the CTC has to date received 12 merger transactions.
“The Commission approved four mergers that were notified in 2018. Three of the mergers were approved without conditions while one transaction was approved with conditions,” said Ms Ruparanganda.
Two of the four mergers namely the one between OMPE GP IV Property Limited and B Shareholders by Medhold Group Proprietary and the Acquisition of 51 percent shares of Moregrow Enterprises (Private) Limited by Axia Corporation Limited were classified as conglomerate mergers.
The one between Barnes Southern Palace Holding (Private) Limited and Scaw South Africa (Private) Limited was classified as a horizontal merger while the acquisition of 50 percent shares in PetroZim Line (Pvt) Ltd by National Oil Infrastructure Company of Zimbabwe (Pvt) Limited was classified as a vertical merger.
“The significance of mergers to the Zimbabwean economy includes the injection of the much needed foreign direct investment into the country, access to working capital for local firms in cases involving foreign firms and transfer of modern technologies for local industries facing antiquated equipment,” said Ms Ruparanganda.
CTC recently noted restrictive practices in the distribution of stock feeds and day-old chicks.
“CTC has also launched an investigation into the distribution of stock feed and day-old chicks after cases of suspected restrictive practices in the market were reported,” said Ms Ruparanganda.
In a recent statement, the Commission stated that an act of restrictive practices was deemed illegal according to the Competition Act.
“Notice is hereby given to all interested stakeholders and the general public that pursuant to Section 28 (2) of the Competition Act (Chapter 14:28), the Competition and Tariff Commission has commenced an investigation into an alleged restrictive practice into the distribution of stock feeds, as defined in Section 2 of the Act. It is alleged that distributors of day-old chicks are making the sale of chicks conditional upon one buying a particular number of stock feed bags,” said CTC.
The Commission’s Tariff Division of the Commission is also in the process of reviewing six requests for duty protection and relief.