New Holdco Acquisition of Edgars Consolidated Stores Approved with Conditions

The Competition Authority has approved with conditions the acquisition of 100% of the shares in Edgars Consolidated Stores Ltd by New HoldCo.

The Authority says it determined through the analysis of the facts of the merger that 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 provision of clothing apparel, cosmetics, homeware, mobile cellular, stationary and insurance, and unsecured credit, in Botswana.

In its May 3rd decision, the Authority said this is due to the fact thatthe proposed transaction will not alter the structure of the market under consideration; and that the implementation of the proposed merger would not result in the merged entity attaining any dominant position. 

“However, it is noted that the proposed acquisition gives rise to public interest concerns under section 59(2)(e) of the Competition Act in that there may be spill over effects on the Botswana market as a result of the current proposed merger”, the CA said. 

Taking the public interest concerns and pursuant to the provisions of section 60 of the Competition Act of Botswana, the Authority said it approved the proposed acquisition with the conditions that  “the merged entity shall use all its endeavors to ensure that the business of Edgars Consolidated Stores Limited (Edcon) is maintained in Botswana; and in 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 CA further stated 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.