CA Approves with Conditions Acquisition of 50% Shares of Dennis Service Station in Serowe by Ngami Motors

The Competition Authority has approved with conditions the proposed acquisition of 50% issued shares in Dennis Service Station (1976) Pty) Ltd from Gavin Blackbeard by Ngami Motors (Pty) Ltd. 

In its decision of 12 April 2019, the Authority said it determined through the analysis of the facts of this merger that there are no substantive competition concerns that will arise in all the markets under consideration, namely: new vehicle sales; used vehicle sales; motor parts sales; and service centre, given the fact that: 

The proposed transaction is not likely to result in substantial lessening of competition, nor endanger the continuity of service; and that the implementation of the proposed merger is not expected to result in Dennis Service Station attaining a dominant position, as the transaction is not expected to affect the current market structure.

However, the Authority said the proposed acquisition gives rise to public interest concerns under section 59(2)(f) of the Competition Act in that the merger entails the transfer of shares previously held by a citizen to a foreign owned entity. 

“According to the Ministry of Investment, Trade and Industry, the operation of petroleum products through filling stations is reserved for citizens of Botswana through the Trade Act, 2003 while the wholesale distribution of petroleum is not reserved,” the Authority said.

Taking the public interest concerns and pursuant to the provisions of section 60 of the Competition Act of Botswana, the Authority approved the proposed acquisition with the conditions that: 

The merged entity should ensure that the shareholding in the business of Dennis Caltex Service Station is 51% and 49% for citizen(s) and non-citizen(s) respectively, as per the Trade Act of 2003;that Halfway Ngami Toyota concludes the ongoing process of transferring 10% of its shares to a local citizen; not later than six (6) months from the decision date; and thatthe merging parties should provide the Authority with a status update on compliance towards this decision within six (6) months from the date of this determination. 

The Authority said as stated under section 66 of the Act, this approval does not override or negate any other mandatory statutory approvals or processes that any of the parties to this merger must comply with under the Laws of Botswana.