Mergers and Acquisitions
Takeover / Merger between First Merchant Bank and International Commercial Bank
The Competition and Fair Trading Commission received an application from First Merchant Bank Limited (FMB) for authorization of a proposed acquisition of 100% shareholding in International Commercial Bank Limited (ICB Malawi) by FMB from ICB Financial Group Holdings AG, a holding company based in Switzerland whose business extends to banking services.
The transaction was part the whole transaction in which ICB Financial Group Holdings agreed to sell FMB, shares in its subsidiary companies present in Malawi, Zambia and Mozambique. The subsidiaries included ICB Malawi, ICB Mozambique and ICB Zambia respectively.
Acquisition of 100% Shareholding in International Commercial Bank by First Merchant Bank
On 24thApril, 2013, the Competition and Fair Trading Commission received an application for authorization of acquisition of 100% shareholding in International Commercial Bank Limited (ICB Malawi) by First Merchant Bank (FMB) through ICB Financial Group Holdings AG, a holding company based in Switzerland, whose business extends to banking services.
The transaction was part of the overarching transaction in which ICB Financial Group Holdings agreed to sell shares in its subsidiary companies present in Malawi, Zambia and Mozambique. At the time of the transaction, ICB Malawi did not meet the minimum regulatory capital and other liquidity requirements meant to safeguard customers.
Following consultations with relevant stakeholders in market and final assessment of the same by the Commission, it was found that the acquisition of ICB by FMB would protect depositors, who would have suffered if the company had liquidated due to capitalization problems.
Given number of players in the banking industry, it appeared to the Commission that the consolidation of banks would result in strengthening the industry for the benefit of the banking public. The transaction would, therefore, not substantially lessen competition in the banking industry in Malawi.
Therefore,the Commission authorised the acquisition of 100% shares of ICB Financial Group Holdings in ICB by First Merchant Bank.
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Acquisition of at least 41.99% shareholding in CFAO subsidiaries (CFAO Malawi and CICA Motors Ltd) by Toyota Tsusho Corporation
Toyota Tsusho Corporation (TTC) submitted an application for authorization of a proposed acquisition of at least 41.99% shareholding in CFAO Malawi Limited and Cica Motors Limited (jointly CFAO Malawi), the local subsidiaries of CFAO.
TTC is a Japanese automotive company with commercial presence in Malawi through Toyota Malawi Limited, whose line of business is the selling of branded Toyota cars, spare parts and maintenance and repair services for Toyota cars.
CFAO is a French company involved in trading vehicles, pharmaceuticals, machinery, consumer goods and other products in Africa and French overseas territories. In Malawi, it is represented by its subsidiaries - CFAO Malawi Limited and CICA Motors Limited.
Acquisition of 49% shares in NIKO African Investment Limited by Santam Limited (South Africa)
On 30th July, 2012, NICO Holdings Limited applied to the Commission for authorisation of the acquisition of 49% stake in NIKO African Investment Limited owned by NICO Holdings Limited (NICO) to Santam Limited of South Africa. NICO Holdings Limited was a holding company whose business extends to financial service provision such as banking, short term insurances, pension administration, asset management and information technology. The applicants owned 100% shares in its subsidiary, NIKO African Investment Company, domiciled in Mauritius.
Under the transaction, first step was the transferring of shares held by NICO Holdings in its subsidiaries namely NICO General Malawi, NICO Zambia, NIKO Uganda, NIKO Tanzania and SFG Zimbabwe to NIKO African Investment Company.
The second stage, involved the selling of 49% shares in NICO Holdings owned in NIKO African Investments to Santam Limited. After the transaction NICO Holdings would remain with 51% controlling shares. On the other hand, Santam Limited, a subsidiary of Sanlam Limited, is engaged in short term insurances in South Africa.
An assessment conducted by the Commission showed that the transaction was not likely to lead to substantial lessening of competition in the relevant market. Instead, the transaction would assist NICO Holdings Limited to acquire technical competencies and skills from Santam Limited. On that account, the Commission authorized the transaction.
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