Preliminary findings show that the transaction in which Castel Group is applying to acquire Carlsberg Malawi may not have an effect in more than two countries in the Common Market for Eastern and Southern Africa (Comesa), leaving the mandate to approve or reject the merger to the Competition and Fair Trading Commission (CFTC).
The findings show that the acquiring group, Castel, only has operations in the Democratic Republic of Congo while the target, Carlsberg, only has operations in Malawi, thereby not meeting the notification requirements for mergers that are handled by the regional instrument, the Comesa Compeition Commission.
However, the Comesa competition organ, which has a mandate to regulate mergers that affect trade in the Common market, says it still reserves the right to intervene in the transaction should it become aware that the transaction meets the minimum requirements for mergers that are notifiable to the regional instrument.
Head of Acquisitions and Mergers at the Comesa Competition Commission, Willard Mwemba, said in an emailed response that the transaction presents minimum requirement for the Comesa competition regulations’ jurisdiction to be invoked.
“The transaction is national and does not fall under the jurisdiction of the Comesa competition regulations. But if at all the transaction is a Comesa transaction, then CFTC shall refer it to us,” Mwemba said.
A few weeks ago, Carlsberg Breweries AS of Copenhagen sold its 59.48 percent stake in Carlsberg Malawi to French beverage company, Castel Group, after Press Corporation Limited, which owns 39.65 percent in Carlsberg Malawi, failed to exercise pre-emptive rights to buy Carlsberg Breweries shares.
CFTC is in the next few weeks scheduled to meet officials from Carlsberg and Castel for consultations.
In approving mergers and acquisitions, CFTC, carries out assessments on the impact of transactions on competition in the market as well as human interest, where the body assesses the risks of job losses.
However, in the case of the Carlsberg deal, CFCT says it will only be able to give a position on whether job losses should be expected from the transaction after it completes its assessment procedures.