By Ntokozo Nkambule
Umlamuli, a wholly owned subsidiary of the Public Service Pensions Fund (PSPF) has received approval for the acquisition of the Eswatini Association of Savings and Credit Co-Operatives (ESASCCO) building stationed in Mbabane.
The acquisition was confirmed by the Eswatini Competition Commission (Compco) in its (Third Quarter 2022/23) Report.
Previous reports allege that the building was acquired by a PSPF subsidiary for E35 million. The building is intended to be used for commercial purposes.
“The immovable property is held by Kwakitsi a property holding company ultimately controlled by the Eswatini Association of Savings and Credit Co-Operatives (ESASCCO). Presently, on the immovable property, there is an incomplete building (the ESASCCO Building), which is intended to be completed and used for commercial purposes.”
The Commission notes that even though there are overlaps between PSPF and ESASCCO, as they both have business interests in commercial property in Mbabane, the overlap results in 0.0017% accretion, which is below 15%.
“The combined market share post-merger will be below 15% and as such the transaction is categorized as a phase 1. Post-merger, the market shares, and concentration in the relevant market will be slightly altered. Countervailing power and barriers to entry will not be affected or altered hence, the transaction is unlikely to result in the substantial lessening or prevention of competition,” notes the Commission.
Furthermore, the Third Quarter Report by Compco reveals that Mkhaya Trust has acquired OKH Farms which is situated in the Lubombo region.
Mkhaya is in the business of wildlife and tourism in the Lubombo Region. The target assets are immovable properties owned by OKH Farms and CTC. CTC is a subsidiary of OKH Farms.
“OKH Farms is a company duly registered in terms of the company laws of Eswatini and is involved in commercial farming of sugarcane, bananas, and other farming in the Lubombo Region.”
The Commission acknowledged that there are overlaps in the relevant markets as both businesses are in Lubombo Region since Mkhaya already owns farmland there.
“In as much as there are overlaps in the relevant market the combined market share of the merged firms is below 15% and as such the transaction was categorized as a phase Post-merger the merging firms will have a combined market share of 0.37% in the Lubombo Region since Mkhaya will attain a market accretion of 0.27%, which is insignificant and will not change the structure of the relevant market.”
Additionally, the Eswatini Association of Savings and Credit Co-Operatives (ESASCCO) has also acquired 100% shares in View Court, in this reporting quarter.
The latter is a company duly registered and incorporated in accordance with the laws of Eswatini and owns commercial property that is in the business of leasing office and retail space.
In its analysis, Compco found that there were no product overlaps in the relevant market, as ESASCCO is a credit co-operative whilst View Court is a property holding company for a commercial property in the business of leasing office and retail space.