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Zimbabwe records more mergers

TEN mergers have been approved so far by the Competition and Tariff Commission (CTC) amid indications that more local companies would seek foreign partners to strengthen balance sheets.

BY VICTORIA MTOMBA

CTC assistant director Benjamin Chinhengo told Standardbusiness that more mergers were recorded since the beginning of the year compared to seven recorded in 2014.

“This year we expect more mergers as the economy has not really changed from last year and companies are trying to strengthen their balance sheet from foreign competition,” he said.

Chinhengo said most of the companies that merged this year were engaging with foreign partners, a move he said would also boost foreign direct investment (FDI) inflows into the country.

Zimbabwe has been failing to attract significant FDI inflows since 2009 and has not exceeded $500 million in a single year.

Mergers that have been concluded are Agrifeeds Private Limited and Klein Karoo, a South African company, Paza Buster and Auto World, Continental outdoor media holdings and Jcdecaux SA Holdings Proprietary Limited.

Chinhengo said some transactions were in the preliminary stages of approval by the CTC. The transactions include Twenty Third Century Systems and EOH Consultancy, Dandemutande, AfricaOnline and Iway Africa, National Foods and Probrands, Takura Capital and Lobels Bread, Seed Co and Prime Seeds and Olivine and Wilma.

Two mergers at the CTC board for approval include SAI Enterprise Pvt and Chriss Fontein marketing Pvt Limited and Nanavacinvestments trading as Choppies and Pioneer Pannar Seeds.

CTC approved 10 mergers in 2013 and 11 mergers were approved in 2012. Companies merge to strengthen their business, to diversify or to increase their footprint in the market. The CTC seeks to protect markets from monopolies and also to ensure that fair competition prevails on the market.

The CTC was established in 1998 and by September 2010, the commission had handled over 1 000 competition cases with 53% involving restrictive and unfair business practices and 47% being mergers and acquisitions.

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