Competition Authority Approves with Conditions the Acquisition of Bank of India (Botswana) by First Capital Bank

The Competition Authority has approved with conditions the acquisition of 100% issued and paid up ordinary shares of Bank of India (Botswana) Ltd by First Capital Bank Ltd.

Announcing its decision on 3rd April 2019, the Authority said the analysis of the facts of the case have shown that there are no substantial competition concerns that will arise in the market for the provision of commercial banking services, given the fact that:the proposed transaction is not likely to result in substantial lessening of competition, due to market characteristics such as countervailing power and effective remaining competition, amongst others, that exist in the market under consideration; and that the merger would not result in the merged entity attaining any dominant position in the market under consideration.

The Authority however noted that the proposed acquisition gives rise to public interest concerns under section 59(2)(e) of the Competition Act as it is envisaged that upon implementation of the proposed transaction, all local employees shall be absorbed by the acquirer. 

Taking the public interest concerns and pursuant to the provisions of section 60 of the Competition Act, the Authority approved the acquisition with the conditions that: there shall be no merger specific retrenchments that may affect the local employees of Bank of India (Botswana) Ltd; and that these employees shall be transferred to First Capital Bank Ltd on terms and conditions substantially no less favourable than their current terms and conditions of employment.

The Authority notes that “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”.