Milco SA Granted Approval with Conditions to Acquire 100% Shareholding in Clover Industries

The Competition Authority has approved with conditions the proposed acquisition of 100% shareholding in Clover Industries Ltd by Milco SA (Pty) Ltd.

The Authority determined through the analysis of the facts of the mergerthat the proposed transaction is not likely to result in the prevention or substantial lessening of competition, or endanger the continuity of the services offered in the market under consideration, in Botswana. 

Announcing its decision on 30th July 2019, it said this is due to the fact that the proposed transaction will not alter the structure of the market under consideration, andthe implementation of the proposed merger would result in the merged entity inheriting a dominant position.

However, the Authority noted that the proposed acquisition gives rise to public interest concerns under section 59(2)(b) of the Competition Act of Botswana in that there may be spill over effects on the Botswana market as a result of subsequent changes emanating from the proposed merger.

Taking the public interest concerns and pursuant to the provisions of section 60 ofthe Competition Act, the Authority has approved the proposed acquisition with the following conditions that:  there shall be no retrenchment of any employee as a result of the proposed merger;the merged entity shall use all its powers to ensure that the business of Clover Botswana is maintained in Botswana to retain business continuity with the local based dairy input suppliers; andin the event that the merged entity is compelled to change the Botswana business model, such intentions should be communicated to the Competition Authority with a clear justification for the decision.

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