Competition Commission of South Africa in a statement prohibited the transaction proposed by ECP Africa intended to acquire Burger King (South Africa) and Grand Foods Meat Plant (Pty) Ltd (grand Foods) from Grand Parade Investments.
What would be the impact of the merger?
Commission found that the merger would lead to a significant reduction in the shareholding of historically disadvantaged persons in the target firm, from more than 68% to 0% as a result of the merger.
The said merger would not have resulted in a substantial prevention or lessening of competition.
Commission stated that the acquiring firms do not have ownership by historically disadvantaged persons (HDPs). As a direct result of the proposed merger, the merged entity will have no ownership by the HDPs and workers.
No Public Interest
Therefore, Commission was concerned that the proposed merger would have a substantial negative effect on the promotion of greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons in firms in the market as contemplated in Section 12A(3)(e) of the Competition Act.
Concluding the statement, Commission stated that the proposed transaction raised significant public interest concerns and has a substantial negative effect on the promotion of a greater spread of ownership.
Competition Commission of South Africa