Acquisition of at least 41.99% shareholding in CFAO subsidiaries (CFAO Malawi and CICA Motors Ltd) by Toyota Tsusho Corporation

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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.

Assessment of the transaction showed that the merger had potential to raise competition concerns as it involved amalgamation of companies involved in distribution of competing brands of vehicles - Nissan and Ford by CFAO and Toyota. However, the Commission authorized the transaction based on public interest considerations including avoidance of disruption of the supply of certain brands of motor vehicles into the Malawi.

To remedy competition concerns established, approval was granted on condition that Toyota Malawi and CFAO Malawi/ CICA Motors would operate as independent companies and TTC would not engage in conduct that would undermine the operation of CFAO and CICA Motors or use the joint market power of CFAO Malawi and Toyota Malawi to undermine other motor vehicle distributors in Malawi.

Consequently, the Commission and Toyota Tsusho Corporation signed a Memorandum of Undertaking as part of the enforcement programme.