The proposed merger notifications by both BOMAID and AON Holdings that were initially rejected by the Competition Authority will now forge ahead after the Authority recently backtracked on its decision.
Last year, the Competition Authority rejected the proposed merger between BOMAID and AON Holdings, citing ‘public interest concerns and directed that in each of the transaction, if any party wanted to sell shares held by CEDA Venture Capital, they should sell to citizens that are not part of the current shareholding to broaden citizen empowerment’.
Last month, the Competition Commission announced that it had the power to hear appeals against the decisions of the Competition Authority on mergers. Before the announcement was made, it was not clear whether decisions of the Competition Authority on Mergers were appealable to the Competition Commission like all other competition issues.
Both BOMAID and AON Holdings had since filed notices of appeal to the competition Commission against the determination of the Authority in the mergers notifications they filed. The Competition Authority reports to have entered into a mutual settlement agreement with both BOMAID and AON respectively. This mutual settlement therefore means that the matters will not appear before the Competition Commission.
“The settlement agreements as signed by the Authority and each party contain a condition that in the event either Aon Holdings or BOMAID disposes of shares acquired from CEDA Venture Capital Fund when it exits its investment, both parties should offer those shares first to a Motswana partner or partners. The transactions, as notified by the parties, have, after the signing of the settlement agreements, been implemented,” said Gideon Nkala, the Competition Authority’s Director of Communications and Advocacy.
In their first annual report ending 31 March 2012, the Competition Authority reports to have received 37 cases against a target of 25 cases. Of the 37 cases, mergers accounted for 51 percent of the cases, of which 11 were assessed and closed. As of the overall 37 cases, 18 cases were closed and 19 were carried forward to the next year.