Details of the Competition Commission`s about-turn on Altech`s purchase of NamITech will be placed before the Competition Tribunal just three months after the commission recommended against it.
A Competition Commission statement issued yesterday said it "revised its assessment of the transaction and now recommends approval by the tribunal".
According to the statement, the three parties negotiated a settlement agreement, which they maintain addresses the anti-competitive consequences of the merger.
The Competition Tribunal, which is the final arbitrator on mergers, before the Appeal Court, will hear from 13 to 16 January why the merger is now recommended.
The Competition Commission originally recommended against the purchase in October because the transaction would remove an effective competitor from the market and create significant competition concerns in both horizontal (competitor) and vertical (supply chain) relationships.
Concerns were also raised about the black economic empowerment aspect, as NamITech is partly owned by Clidet, whose entire ordinary share capital is owned by Pamodzi Investment Holdings, and the Mphatllalatsane Investment Company. Some 51.8% of NamITech is owned by paper and packaging group Nampak.
The commission`s original recommendation prompted Altech CEO Craig Venter, at the release of his company`s annual results soon after, to say that Altech and NamITech will oppose the decision.
Altech is owned by JSE-listed electronics group Altron and has a turnover of around R4 billion per year. In December, Altech announced it would sell 30% of its stake in another of its subsidiaries, Alcom, to black empowerment investment firm Matomo ICT Group.
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