Manufacturing industry dominates mergers in the first half of the year

By Stanley James

More than 40 percent of mergers approved by the Competition and Tariff Commission (CTC) since January this year are in the manufacturing industry as firms target increasing productivity.

The commission revealed a rebound in the manufacturing industry which has seen capacity utilisation rising to over 40 percent, with firms merging operations to increase market share and offer a wide range of products.

It also states that some of the acquisitions are aimed at ensuring access to raw materials and finance.

“There are 11 merger decisions that have been finalised for the 1st half of 2021, with 7 approved without conditions and four approved with conditions. The manufacturing sector accounts for 45 percent, finance 28 percent, agriculture 9 percent, wholesale, retail 9 percent and transportation 9 percent,” Competition and Tariff Commission, Senior Research Tatenda Zengeni said.

However, University of Zimbabwe Business School Chairman Dr Nyasha Kaseke raised concern over the impact of the approved mergers on economic growth.

“While it is a good move, the key question is the extent to which the approved mergers will not cause any harm to other business within the economy,” Kaseke said.

The commission is an independent statutory body established to monitor, regulate and evaluate unfair business practices, tariff charges and competition in the economy.