• Market Watch

NaCC conditionally approves two mergers

• 9 Months Ago - 2023-11-22 00:00:00

The Namibian Competition Commission (NaCC) has conditionally approved two mergers between Vitol Emerald Bidco (VEB) and Engen as well as Rwco Gmbh and Schwenk Namibia.
The first merger, identified as an international transaction, will allow Vitol Emerald Bidco to acquire, via a share purchase agreement, 74% of the entire issued share capital of Engen, which will result in VEB enjoying sole control over Engen.
VEB is controlled ultimately by the Vitol Group, which is a large independent energy marketing and trading group of companies.
Physical supply and distribution of crude oil, petroleum products and natural gas are the Vitol Group’s core business. In Namibia, through Validus, the Vitol Group is currently active in the importation and distribution of refined petroleum products to commercial customers, and the commercial distribution of fuels.
NaCC found that the merger is likely to result in the prevention or substantial lessening of competition or in any undertaking acquiring or strengthening a dominant position.
In addition, the transaction is likely to affect employment negatively, as the transaction results in a duplication of roles and therefore resulting in retrenchment of employees. The NaCC set employment conditions, as well as horizontal conditions to the merger approval.
Cement
The second transaction entails the acquisition by RWCo of the entire issued share capital of Schwenk Namibia from Schwenk Zement. RWCo GmbH will acquire sole unfettered control over Schwenk Namibia.
RWCo GmbH, whose shareholders are offshore, are involved in the manufacture, production and distribution of building materials. Schwenk Namibia is a holding company that does not sell any products or provide any services. Schwenk Namibia holds interests in companies that operate in different industries, which include renewable energy and cement production.
NaCC found that while the transaction will not lessen competition and affect employment, it raises an opportunity to promote local ownership through additional Namibian ownership in Ohorongo cement.
Therefore, the right of first refusal of the acquiring or merged undertaking notwithstanding, at any stage after the implementation of the transaction, should any shareholding become available for purchase, the acquiring or merged undertaking shall be prohibited from acquiring any further shareholding for a period of one year from the date of offering of such shareholding, to allow opportunity to a Namibian owned undertaking to acquire such shareholding.
Should no Namibian entity successfully acquire the shareholding by the end of such year, the acquiring or merged undertaking shall be entitled to acquire shareholding, if so advised or elected.