Increase in transaction volumes attributed to
Governent policies
Government business policies geared towards improving macro-economic stability and
increasing investor confidence have been attributed to the approval of 24 mergers worth
US$1 billion last year by the Competition and Tariff Commission (CTC).
The CTC said 54 percent of the merger transactions involved domestic firms acquiring
other local firms.
The rationale included capitalisation of businesses such that firms sold part of their
equity to local firms to raise funds, it noted.
The fourth quarter report said the remaining 46 percent involved local firms being
acquired by foreign firms of which five countries were involved namely China, Hong
Kong, Mauritius, United Arab Emirates and South Africa.
South African firms dominated foreign firms acquiring local firms, indicating the strong
economic and trade relations between Zimbabwe and South Africa.
“The commission assessed and made decisions on 24 merger transactions in 2022 with a
cumulative purchase consideration valued at US$1,024 billion.
“Possible reasons explaining the increase in transaction volumes during the year include
Government policies that improved macro-economic stability and increased investor
confidence,” reads part of the report.
It added that in terms of sectoral distribution of the transactions, the manufacturing
sector dominated followed by mining, agriculture, information and communication and
transport and storage sectors.
The Government’s vision towards building a US$12 billion sector by 2023 led to an
increase in mining mergers as foreign investors bought local mines, CTC noted.
The commission noted that last year, unlike other years prior to a general election, was a
busy 12 months attributed to Government efforts to create a stable macroeconomic
environment and its policies towards re-engagement.
It said it witnessed increased merger activity involving foreign companies acquiring local
companies.
In the period under review, CTC approved the unconditional merger of the petroleum
firm, Zuva Group and a Dubai-headquartered global energy logistics company, Tristar
Transport.
The commission noted that the merger did not affect effective competition in the
relevant market as the transportation services of fuel are highly competitive with more
than 20 significant players.
In April 2022, CTC received notification of the acquisition of the issued ordinary shares
in HG Storage International by Tristar Transport LLC.
Tristar is a global business headquartered in Dubai offering end to end fuel logistics
solutions to blue-chip clients, including international and national oil companies and
intergovernmental organisations.
HGS is a diversified portfolio of strategically located petroleum products storage,
throughput and downstream retail assets across major storage hubs and import markets.
Its interests in Zimbabwe are held through ZP Energy Mauritius Limited — incorporated
in Mauritius in which HGS holds 70 percent shareholding.
HGS operates downstream retail and distribution networks in Zimbabwe through the
Zuva Group.
However, despite operational limitations emanating from the current Competition Act,
the Commission said it made significant steps towards investigation of anticompetitive
practices.
“This resulted in orders being registered against some firms which violated the
provisions of the Act,” it said.
Last year, the commission condemned conditional selling of day-old chicks by different
suppliers across the country saying conditional selling was exploitative in nature as it
forces farmers to access chicks on condition that they buy stock feeds.
It also imposed a fine of US$9,1 million on Innscor Africa Limited (Innscor) for
consummating the merger of one of its subsidiaries without the Commission’s approval.
Innscor Africa Limited
Innscor was also ordered to divest from the merger “forthwith”.
Going forward, the Commission anticipates a busy year ahead as more firms are likely to
report anticompetitive practices.
It anticipates that the Competition Amendment Bill will be passed through all the
processes and signed into law.-The Chronicle
