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AFRICA CHICKS ACQUIRES HORSESHOE FARM IN MANZINI

19/02/2023 07:30:00 Mhlengi Magongo

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MBABANE - The Eswatini Competition Commission has approved the acquisition of Horseshoe farm in Manzini by Africa Chicks Swaziland (Pty) Ltd.

The farm was owned by Owned by Early Harvest Farming (Pty) Ltd, Chief Executive Officer (CEO) Muzi Dlamini disclosed that the farm comprised mainly of grasslands with some old irrigated lands and is currently used for grazing. He said they considered the products of the firms and concluded that the relevant market was the market for farmland in Manzini Region, Eswatini.

“There are overlaps between the activities of the merging parties since Africa Chicks, owns commercial land for farming at Extension 1 Ngwenya Industrial Site, Oshoek. However, the overlaps do not come about as a result of this transaction since the farmland being acquired is in a different geographical area,” added Dlamini. As such, the CEO mentioned that there would be no market share accretion in the relevant market and the transaction was categorized as a phase 1 because the combined market share post-merger was below 15 per cent.

Postmerger, he said the market shares in the relevant market, market concentration and barriers to entry would not be affected and hence the transaction was unlikely to result in the substantial lessening of competition in the country. Therefore, the transaction was approved without conditions. The Eswatini Competition Commission (ECC) s approved nine mergers and acquisitions in the second quarter.

ECC examines merger notifications in order to make a determination on the effects of such transactions on competition and then either gives conditional approval, approval with conditions or prohibits the transactions based on the outcome of the analysis. The approved mergers in the second include the acquisition by Mr. Price Group Limited (“Mr. Price”) of sole control over Blue Falcon 188 Trading (Pty) Ltd Trading as Studio 88 Eswatini (Pty) Ltd.

ECC said they considered the products of the firms and concluded that the relevant market was the retail of branded sports-lifestyle; athleisure oriented clothing apparel, footwear and accessories by departmental chain stores in Eswatini. They said there were no overlaps between the activities of the merging parties in the relevant market and that the proposed transaction was as such categorized as a phase 1 since there were no overlaps in the relevant market.

“Post-merger, there will be no market accretion in the relevant market, market concentration, countervailing power and barriers to entry will not be affected and the transaction is unlikely to result in the substantial lessening or prevention of competition. Therefore, the proposed transaction was approved without conditions,” adds the commission.

Another approved acquisition was the acquisition of 49.36 per cent shares by Adia (Pty) Ltd in Orchard Insurance (Pty) Ltd from African Alliance Limited. The Commission said there were overlaps between the activities of the merging parties in the relevant market since Adia, was already a shareholder in Orchard. ECC added that the transaction was categorized as phase 1 because the combined market share post-merger is below 15 per cent.

“There will be no market share accretion since Adia and its shareholder does not own, directly or indirectly, any other insurance business in Eswatini. Post-merger, the market shares in the relevant market, market concentration, countervailing power and barriers to entry will not be affected and hence the transaction is unlikely to result in the substantial lessening of competition in the country. Therefore, the transaction was approved without conditions,” added the commission.

The third merger and acquisition approved was the acquisition by Xerotech Proprietary Limited of the entire issued share capital in Altron document solutions business division (“ADS”) of Altron TMT Proprietary Limited.

ECC said the transaction was approved without conditions.

The commission said the transaction was a foreign-to-foreign merger between two South Africa entities. However, due to their sales into Eswatini there was a horizontal overlap in their activities particularly in regard to the sale of OAE and related consumables.

They said the transaction was categorized as a phase 1 merger since the combined market shares of the merging firms is less than 15 per cent. The acquisition of 45 per cent shareholding by Public Service Pension Fund (“PSFP”) in Swaziland Radiology Services (“Swaziland Radiology”) was also approved by the commission. ECC said there were no overlaps between the activities of the merging firms. Pursuant to the implementation of the proposed transaction, PSPF acquired control over Swaziland Radiology with 45 per cent shareholding.

Post-merger, ECC said the market shares in the relevant market, market concentration would not change in that the acquiring firm was a new player in the relevant market, countervailing power and barriers to entry would not be affected or altered hence, the transaction was unlikely to result in the substantial lessening or prevention of competition.

Since it was a busy year, the commission further approved the acquisition by Eric Slabbert Agencies (PTY) LTD of industrial land from The Reclamation Group (Swaziland) (PTY) LTD. Eric Slabbert Agencies is a private company with limited liability, and has been in operation in Eswatini since 2004 and its operations include a fabric and paper facility at 12th Street, Matsapha (premises leased from the Eswatini Investments Promotion Authority (EIPA).