The South Africa Competition Commission has blocked the proposed acquisition of Burger King South Africa by private equity fund, ECP Africa, on the basis that BEE shareholding in the company would drop to 0%.
ECP Africa – which comprises several different funds – intended to acquire Burger King and Grand Foods Meat Plant from Grand Parade Investments.
However, the Commission found that the merger would lead to a significant reduction in the shareholding of historically disadvantaged persons (HDPs) in the target firm, from more than 68% to 0%.
“The commission found that the proposed transaction is unlikely to result in a substantial prevention or lessening of competition in any relevant markets,” it stated.
However, with respect to public interest considerations, the Commission found that Grand Parade was ultimately controlled by an empowerment entity wherein historically disadvantaged persons hold an ownership stake of more than 68%, compared to the acquiring firm which has no ownership by these groups.
“Thus, as a direct result of the proposed merger, the merged entity will have no ownership by HDPs and workers.
“The Commission is therefore concerned that the proposed merger will 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.
“The proposed merger cannot be justified on substantial public interest grounds,” it stated.
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
Court Dismisses Monopoly Claims Against Tempur Sealy
Oct 18, 2024 by
CPI
Philadelphia City Council Advances Legislation to Tackle Rent Price-Fixing
Oct 17, 2024 by
CPI
FTC Probes Deere for Potential Anti-Competitive Repair Practices
Oct 17, 2024 by
CPI
Britain’s Ofcom to Outline Strict Guidelines for Tackling Illegal Online Content
Oct 17, 2024 by
CPI
EU Considers Expanding Potential Fines for X, Targeting Musk’s Broader Business Empire
Oct 17, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Refusal to Deal
Sep 27, 2024 by
CPI
Antitrust’s Refusal-to-Deal Doctrine: The Emperor Has No Clothes
Sep 27, 2024 by
Erik Hovenkamp
Why All Antitrust Claims are Refusal to Deal Claims and What that Means for Policy
Sep 27, 2024 by
Ramsi Woodcock
The Aspen Misadventure
Sep 27, 2024 by
Roger Blair & Holly P. Stidham
Refusal to Deal in Antitrust Law: Evolving Jurisprudence and Business Justifications in the Align Technology Case
Sep 27, 2024 by
Timothy Hsieh