AUTHORISATION OF PROPOSED MERGERS AND ACQUISITION

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 1.0 Introduction

 

The Board of Commissioners for the Competition and Fair Trading Commission (hereinafter referred to as "The Commission" held its 46^th Meeting on 23^rd September 2016 in the Board Room of the Competition and Fair Trading Commission Offices in Lilongwe. The Commission, among other things, considered applications for authorisation of the following proposed mergers.

 

• Proposed acquisition of SABMiller plc by ANheuser- Bursch InBev SA/NV (AB InBev);
• Proposed acquisition of shareholding in Charter Insurance Company by Liberty Holdings Limited and Liberty Nominees (proprietary) Limited; and
• Proposed acquisition of Star Radio Limited by Trustees of Timveni Child and Youth Media Organisation.

 

2.0   Summary of the Commission’s Determinations of the Cases

 

A summary of the Commission's determinations on the applications for merger authorisations is presented below:

 

2.1. Acquisition of SABMiller plc by Anheuser-Bursch InBev SA/NV

 

The Commission noted that SABMiller plc submitted an application for authorisation of the acquisition of 100% shareholding in SABMiller plc by Anheuser-Bursch InBev SA/NV. It was submitted that both SABMiller and AB InBev were beer producing companies. In Malawi, SABMiller operates through Malawi Beverages Limited, Malawi Traditional Breweries Limited and Chibuku Products Limited while AB InBev was not physically present in Malawi. However, small quantities of AB InBev beer brands were being imported into Malawi by independent liquor sellers.  

 

The Commission noted that the transaction would not change the market structure for clear beer in Malawi neither would it change other factors that influence competition. In its deliberations, the Commission determined that the transaction would not likely result in substantial lessening of competition in the clear beer market in Malawi. Therefore, the transaction was authorized but subject to conditions aimed at addressing public interest concerns that were identify. The public interest concerns identified relating to likely loss of employment and likely closure of some economic activities carried out by SABMiller subsidiaries. Therefore, the Commission ordered the parties to commit to the following undertakings:  

 

• That there shall be no retrenchment of existing employees of SABMiller; and
• That none of the existing economic activities of the SABMiller shall be closed.

2.2. Acquisition of Shareholding in Charter Insurance Company by Liberty Holdings Limited and Liberty Nominees (proprietary) Limited

The Commission noted that on 13^th May, 2016, the Competition and Fair Trading Commission received an application from Charter Insurance Company Limited for authorisation of a proposed acquisition of 39% shares by Liberty Holdings Limited and 16% shares by Liberty Nominees (Proprietary) Limited. It was submitted that Liberty Holdings Limited and Liberty Nominees (Proprietary) Limited were affiliated companies based in South Africa and they deal in financial services. The target firm, Charter Insurance Company Limited, is a registered general insurance company operating in Malawi.

The Commission noted that investigations established that Liberty Holdings has no direct commercial presence in the general insurance market in Malawi hence the structure of the relevant market would remain the same post-merger. The Commission anticipated that the transaction would increase the capacity of Charter Insurance to underwrite risks apart from increasing employment prospects in the economy.

In view of the foregoing, the Commission authorised the transaction with the condition that the merging parties would not retrench staff.

 

2.3. Acquisition of Star Radio Limited by Trustees of Timveni Child and Youth Media Organisation

The Commission noted that on 23^rd June, 2016 the Competition and Fair Trading Commission received an application from the registered Trustees of Timveni Child and Youth Media Organisation for authorisation of a proposed acquisition of 100% shareholding in Star Radio Limited.

 

It was submitted that Trustees of Timveni Child and Youth Media Organisation is an association incorporated in 2011 under the Trustees Incorporation Act. Timveni Child and Youth Media Organisation is an organisation that aims at empowering children and youth to realise their rights and participate fully in the national agenda. Furthermore, Timveni exists to promote youth talent.

 

The target firm Star Radio Limited is a private radio with a broadcasting license dated 4^th April, 2014 which was granted by Malawi Communications Regulatory Authority. Star radio broadcasts a number of programmes which include entertainment, sports, education and religious programs to mention a few.

 

After a thorough assessment, the Commission established that the transaction would neither result in change of market structure nor competition factors. The analysis showed that the transaction would be beneficial to the general public since Timveni would be using Star Radio as a strategy to reach out and empower the youth with key messages about their rights.

 

The Commission further established that the merger would not likely result in substantial lessening of competition in Malawi. Accordingly, the Commission authorised acquisition of 100% shares of Star Radio Limited by Timveni Child and Youth Media Organisation.

 

For more information, contact Mr Innocent Helema on 0882641126 /01759506 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

CHARLOTTE WEZI MALONDA

EXECUTIVE DIRECTOR