Sunday, June 23, 2024

Competition Authority enjoys Choppies with lion share of Kamoso

Choppies Distribution Centre (CDC) punched the-air as the competition authority approved its lion share stake Kamoso Africa Group (KAG) aimed at making it a significant player in the southern African region.

“This is the right decision. It’s okay. Kamoso was part of the Choppies Group before. Kamoso was a badly run company and its was fraud ridden,” chief executive officer for Choppies, Ramachandran Ottapothu told Sunday Standard on Thursday night.

He said it will take sometime to turn the company around.

In its decision, the competition authority said the merger entity does not have the ability nor incentive to foreclose competitors of the acquiring enterprise in the lower segments of the supply chain as this is not expected to result in any commercial gain.

“The authority does not expect the proposed transaction to give rise to a substantial lessening of competition; restrict trade or provision of service; or to endanger the continuity of supplies in the relevant market in Botswana,” the competition authority said.

Then authority observed that the merger might result in job losses but it put up a back stop- not to allow retrenchments in the next three years.

Choppies is licking its lips for 76 percent of share in Kamoso— a company focused on manufacturing, supplying and distribution–   which will possibly mobbing shares held by lapef 2Rmbv7, a company registered in Mauritius holds 45.17 in the target company.

The other shareholder whose shares are likely to be acquired is Newshelf 1392 (Pty) Ltd registered in Botswana.

Choppies used to hold 30 percent in the old arrangement.

The remaining 24 percent are held by Botswana Development Corporation.

BDC said its investment in Kamoso is in a bid to aid the Corporation’s quest to build resilient supply chain in “food and health security in Botswana as well as driving import substitution by significantly ramping up the existing and growing manufacturing business”.

“BDC also had a view to leverage the networks of co-investors in taking the home-grown business to the regional market, a key milestone in supporting the Corporation’s international expansion drive,” the Corporation told Sunday Standard.

CDC is the main supplier to Choppies—a company which is dual listed on the Botswana Stock Exchange (BSE) and Johannesburg Stock Exchange (JSE). Choppies operations are sprawled across the southern African region; Botswana, Namibia, Kenya, Mozambique and Zambia.

Kamoso is also involved in raft of businesses from food, building materials rice and spice packaging, among others things, across the southern African region, spearheaded from its Gaborone Block 3, Industrial site headquarters.

The decision by the authority is inline with what observers to Sunday Standard Business online service.

Observers indicated that the move is “not expected to affected the market landscape since they are buying from a company they already have an interest in.”

“It is not like they are buying a rival. This is different because they are buying from the company they already have an interest in,” an observer said.

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