Understanding Mergers and Monopolies in Business
Explore the intricacies of mergers and monopolies, the reasons for intervention, the merger process, stakeholder roles, challenges, and key determinations. Learn why regulatory bodies monitor and control mergers to prevent anti-competitive behavior and maintain market balance. Discover how businesses navigate the merger process in Botswana, including notification requirements and the importance of transparency in regulatory filings.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
E N D
Presentation Transcript
Control of Mergers and Monopolies National Stakeholder Conference GICC 15 March, 2012 Innocent Molalapata presentations a a
CONTENTS 1. 2. 3. 4. 5. 6. 7. Introduction Why Intervene in Mergers? The Merger Process Merger Determinations Role of Stakeholders Challenges Conclusion 2 presentations a a
INTRODUCTION A merger occurs when: A business buys shares, leases shares or assets from another business, or two/more businesses combine or amalgamate For example: Tlamelo (Pty) Ltd acquires 80% shares in Mayoyo (Pty) Ltd. 3 presentations a a
WHY INTERVENEIN MERGERS The Authority is mandated to control/regulate mergers & acquisitions. And this entails to:- Monitor, control and prohibit mergers and acquisitions that can result; In the reduction/prevention of competition in the economy In any enterprise acquiring a dominant position in a market 4 presentations a a
THE MERGER PROCESS I Notification of mergers All mergers and acquisitions falling within these thresholds are required to notify their transactions with the Authority:- The turnover in Botswana of the enterprise or enterprises being taken over exceeds P10,000,000;(P10 million) The assets in Botswana of the enterprise or enterprises being taken over exceeds P10,000,000(P 10 million); or The enterprises concerned would, following implementation of the merger, supply or acquire at least 20 percent of a particular description of goods or services in Botswana. 5 presentations a a
THE MERGER PROCESS II Regulation 16(2) of the Competition Regulations, requires the merging businesses to pay a merger fee of 0.01 of either their turnover or assets in Botswana, whichever is higher After receiving the file, the Authority publishes details of the notification in the nationally distributed newspapers This gives an opportunity to any person to submit to the Authority any information they may have regarding the proposed transaction 6 presentations a a
THE MERGER PROCESS III The published notification is also targeted at the Authority s stakeholders which include but are not limited to:- Respective sector Ministries BOCCIM Consumer Association Sector regulators (where present) Industry competitors General public 7 presentations a a
THE MERGER PROCESS IV An in-depth analysis of the merger is then conducted to produce a report The report is then presented to the Mergers Review Committee for the final decision The decisions are based on: Whether the proposed merger would have anticompetitive effects in the economy as a result of; Preventing/lessening competition in the relevant market Any enterprise acquiring a dominant position in the market Whether the proposed merger would have any public benefits 8 presentations a a
MERGER DETERMINATIONS I In making a determination on the notified mergers and acquisition, the Authority shall either:- Authorise the merger, without conditions; Authorise the merger, subject to conditions the Authority considers necessary and reasonable to prevent/lessen any adverse effects of the merger; or Decline the merger if it would result in anticompetitive effects 9 presentations a a
MERGER DETERMINATIONS II The Authority has made determinations on the following mergers to date:- NO. 1 MERGERS & ACQUISITIONS Merger between Marsh Botswana and Alexander Forbes Risk Management Services Conversion of shares in AfriSam Consortium by Government Employees Pension Fund (SA) Acquisition of Defy Botswana by Defy South Africa Acquisition of shares in CA Sales by PSG Financial Services Acquisition of Trojan Security and Facilities Management Group by G4S 2 3 4 5 10 presentations a a
MERGER DETERMINATIONS III MERGERS & ACQUISITIONS Acquisition of Puma Energy Botswana (LPG division) by Easigas Merger between Bokomo and Irvine s Botswana 6 7 11 presentations a a
MERGER DETERMINATIONS IV The Authority has received the following notified mergers to date:- MERGERS & ACQUISITIONS Transunion Netherlands & Credit Reference Bureau 1 2 Steinhoff Int l holdings & KAP Int l holdings 3 Steinhoff Int l holdings & JD group limited 4 Johnson Crane Hire & Gamlath Ralalage Kumara Senarathne Imperial Holdings & Transport Holdings Limited 5 6 Manuli fluiconnecto holdings & Fluid Systems Botswana & Fluid Systems North 12 presentations a a
ROLEOF STAKEHOLDERS Expectations from stakeholders is as follows:- To receive their views on any matters of a competition nature To seek their views on whether proposed mergers may create a potential dominating or monopoly enterprise at horizontal or vertical level Seek receive their views on whether there are any public interest, such as employment, export promotion, citizen empowerment, service delivery, small business linkages, etc 13 presentations a a
ROLEOF STAKEHOLDERS To solicit their views on the past conduct of the merging parties and extent to which they may have history of exploiting customers and consumers To seek views on the overall structure and characteristics of the particular market and how, if any, existing policies affect business entry, and development Any other matters with a bearing on competition and market developments The Authority appeals to stakeholders to take heed of time constraints as the statutory timelines for assessment of mergers by the Authority is 30 days. 14 presentations a a
CHALLENGES Lack of relevant statistics Market shares Lack of adequate and timely feedback Absence of sector regulators in certain key sectors Competition Authority s role in the economy is yet to be understood Some stakeholders are not sure whether their submissions will be treated with confidence The subject matter may appear complex to some as they don t know 15 what to submit presentations a a
CONCLUSION The Authority undertakes: To maintain best international practices in the investigation and assessment process To ensure professionalism at all times in merger processes To make decisions in the interest of the Botswana economy To assure respondents of confidentiality To continue to take consultative approach on all its merger and takeover reviews 16 presentations a a
Thank you Email: competitionauthority@gmail.com presentations a a
