In one of its first decisions of the year, the Competition Authority has decided not to approve the acquisition of assets and cession of the main contract belonging to 4Ms Group Holdings (Pty) Ltd by Transport Holdings Ltd.
Transport Holdings (incorporated in Botswana), is owned 80 percent by Imperial Holding Group (incorporated in South Africa) and the remaining 20% is held by Mr. Anthony Lee, the Managing Director of Transport Holdings.
The target enterprise, 4MS Group, is a company incorporated under the Laws of the Republic of Botswana. 4MS Group was established in 2004 as a Citizen/ Driver Empowerment Scheme by Kgalagadi Breweries Ltd (“KBL”), and it is in the businesses of ad hoc line haul transport to the general market and line haul transport services to KBL.
The hearing with each of the parties to the transaction and other interested parties, was held late last year pursuant to section 58(3)(a) of the Competition Act.
On Friday, Acting Chief Executive of the Competition Authority Gideon Nkala said that a decision has been taken to block the takeover, “on the grounds that the facts, analysis and conclusions of the assessment have shown that there are competition and public interest concerns that arise in the line haul transportation services market on account of the aforementioned acquisition, in Botswana”.
The Authority said that the proposed transaction is likely to result in reduced competition due to the removal of a competitor in the line haul transportation services market.
Transport Holdings acquired the business of Mulbridge Transport Ltd early last year which was approved by the Competition Authority. Transport Holdings wholly owns Express Cartage (Pty) Ltd and has 70% shareholding in Imperilog Botswana in Botswana. Express Cartage is engaged in general consolidation transportation and provide line haul for some contract customers. Imperilog is an agent for global freight forwarders and engaged in customs clearing services. Transport Holdings, together with its subsidiaries are operational in Botswana, South Africa, Mozambique and Namibia.
“The implementation of the proposed merger is expected to result in the merged entity attaining a dominant position; and is expected to result in retrenchments and citizen disempowerment”, Nkala said.