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Zimbabwe records 50% increase in merger transactions

Story by Stanley James, Business Editor

ZIMBABWE has recorded a 50% increase in merger transactions since January this year as companies expand their portfolios in response to the Second Republic’s pro-business policies.

The Competition and Tariff Commission (CTC) has revealed that the manufacturing industry is dominating the approved 12 transactions followed by the financial and insurance sector as well as agriculture, forestry and fishing.

The Commission reveals that 75% of the transactions involved Zimbabwean firms and the remaining 25% involved South African companies acquiring local entities.

CTC spokesperson Mr Tatenda Zengeni highlighted that the increase in merger transactions is driven by investors’ desire to grow businesses.

“Seven merger transactions were approved without conditions and three were approved with conditions while one transaction was prohibited and one transaction awaiting representations. There was a 50% increase in merger decisions rendered in the first half of 2023 compared to the first half of 2022. The merger disapproved had negative ramifications in the FMCG market,” said Mr Zengeni.

“Post-merger, the merged entity would acquire market power to the detriment of competitors and consumers. In cases approved with conditions, companies in upstream markets were ordered to continue providing downstream firms at nondiscriminatory terms and conditions to address issues of input foreclosure after a merger has been consummated, then in other cases approved with conditions, companies were ordered to divest as a remedy to address anti-competitive concerns such as using market power to prevent competitors from entering or expanding in a market,” he added.

Some of the transactions concluded in the first half of the year include the acquisition of Marsh Holdings by Old Mutual Zimbabwe Limited, Zimco Group Proprietary by Autox Proprietary, the purchase of Fertiva Proprietary by Kali Union as well as a joint venture involving Horncul Investments and Blackhide Investments.

There is also the purchase of majority shareholding in Danny’s Auto by a South African Company, a merger involving Almin Metal Industries and City Glass and Paint, the acquisition of a 50% stake in Shanksville Farming by Annunaki Investments and the acquisition of a 100% shareholding of Davis Granite by Takura Capital Partners, among others.

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