eBusiness Weekly
Africa Moyo and Fradreck Gorwe
The Competition and Tariff Commission (CTC) approved three mergers and acquisitions in the fourth quarter of last year, as local companies seek to either grow their businesses or team up with others to ensure going concern status.
The mergers and acquisitions included the snapping up of a 49 percent in Restapedic (Pvt) Limited by TV Sales and Home; the acquisition of 49,68 percent shares from Alliance Insurance Company and Tropical Reinsurance Company by Nzou Limited; and the acquisition of Insuraserve (Pvt)by Hunt Adams & Associates (Pvt) Limited.
Restapedic, which is based in Msasa, Harare, manufactures beds for the medium to high end markets while TV Sales and Home is into retail and distribution of home appliances including audio visual equipment, freezers and fridges, bedroom, lounge and dining suites.
Following the acquisition, a brand new company called Maton Trading was set up.
The CTC approved the TV Sales and Home/Restapedic tie up on condition that Maton Trading continues to supply its competitors downstream market at the same terms as offered to TV Sales and Home.
Further, TV Sales and Home was directed by the CTC to continue purchasing from its competitors in the upstream market, as a condition to the deal.
The transaction was classified as a vertical merger.
TV Sales and Home was launched in Zimbabwe as one small retail store in central Harare, then trading as TV Sales and Hire.
It has now grown to become a top furniture and electronic retail brand in the country with over 44 retail stores.
TV Sales and Home is a member of Axia Corporation Limited and one of three of Axia’s business units operating within the speciality retail and distribution sector.
The other transaction approved by CTC that involved the acquisition of 49,68 percent shares from Alliance Insurance and Tropical Reinsurance companies by Nzou Limited, had no conditions tied to it.
It was a classified as a horizontal merger.
Nzou Limited, a special purpose vehicle set up to acquire the two companies, currently does not have operations both in Zimbabwe and Mauritius, where it is incorporated.
Alliance Insurance is locally registered and offers a range of insurance products including risk policies in farming, assets, financial, accident and marine.
Tropical Reinsurance is also registered locally and its core business is “facultative and treaty reinsurance business from both the local an external markets”.
CTC said Nzou Limited will operate “through a shareholding in both Alliance and Tropical Reinsurance Companies”.
Regards the acquisition of Insuraserve (Pvt) by Hunt Adams & Associates (Pvt) Limited, CTC said the merging parties are “insurance brokers registered by the Insurance and Pensions Commission”.
Hunt Adams & Associates will be absorb Insuraserve business and establish one huge firm taking on board its employees and its current operations.
Both parties offer policies for motor vehicles, houses, engineering, agriculture, personal accident, medical health, bond indemnity and goods in transit insurance.
The deal was classified as a horizontal merger.
Increasing interest by investors in several sectors of the economy has culminated in a number of mergers, ranking Zimbabwe fourth in terms of mergers and acquisitions in the Common Market for Eastern and Southern Africa (COMESA) bloc, after Kenya, Mauritius and Zambia.
CTC, a statutory body established under the Competition Act (Chapter 14:28), has a mandate of implementing the country’s competition policy and execution of trade tariffs policy.
CTC envisions a “Zimbabwe with fair markets, vibrant industry and enhanced consumer welfare by 2020.”
