- Kamoso/BDC did not file merger notice to Competition Authority
- BDC splashed P200million on the deal
- Competition Authority could terminate the acquisition
- BDC, Kamoso could be fined by Competition Authority
- Ram Ottapathu still largest shareholder
KEABETSWE NEWEL & TLOTLO KEBINAKGABO
The Botswana Development Corporation (BDC) and Kamoso Africa, omitted to file a merger/acquisition notice with the Competition Authority, thus violating the Competition Act, The Botswana Gazette has established.
In an interview with this publication, Gideon Nkala, Communications Director at the Competition Authority said a merger notice was not filed by the two companies, which he said contravenes section 54 of the Competition Act read together with Regulation 20 of the Competition regulations.
According to the Competition Act, a merger is subject to review if the turnover in Botswana of the enterprise or enterprises being taken over exceeds P10 million. Kamoso’s annual revenues exceed US100 million (more than P1 billion).
Further, it is subject to review if the assets in Botswana of the enterprise or enterprises being taken over exceed P10 million.
It is also expected to be filed with the Competition Authority if the enterprises concerned would, following implementation of the merger, supply or acquire at least 20 percent of a particular description of goods or services in Botswana.
At BDC, Head of Communications and Marketing Boitshwarelo Lebang did not reveal reasons why a merger notice was not filed as per the regulatory requirements. Neither did Ian Dewar, Chief Executive Officer (CEO) at Kamoso Africa, who referred this publication to RMB and BDC, the major shareholders. At Rand Merchant Bank (RMB), Andrew Aitken also did not reveal why a merger notice was not filed, but referred this publication to BDC.
According to Nkala, any merger that meets the threshold of a notifiable merger has to be notified with the Authority. “When a merger is implemented in contravention of the Act, there are a number actions which the Authority can take including directing the enterprises not to complete the merger, dispose of shares, terminate agreements or even imposing a fine in terms of section 58 of the Competition Act,” Nkala revealed.
At BDC, Lebang said P200 million was spent to acquire 24 percent stake in Kamoso Africa. The stake was acquired from Ninety One (previously Investec Asset Management) Africa Private Equity Fund 2, RMB Ventures (RMBV) and other shareholders.
Post the acquisition, the wealthy Choppies Enterprises Limited CEO, Ramachandran Ottapathu is one of the major shareholders alongside RMBV and BDC.
Founded in 2015, Kamoso currently employs over 1,200 Batswana across its different business lines and has established itself as one of Southern Africa’s leading manufacturing, supply and distribution companies. Kamoso’s product range consists of diversified fast-moving consumer goods, pharmaceuticals, liquor, building materials and equipment.
Kamoso’s Builders Mart segment is a market leader in Do-It-Yourself (DIY) with over 25 retail outlets. Operating six manufacturing facilities, eleven warehouses, and a fleet of over 100 delivery vehicles, the Fast-Moving Consumer Goods (FMCG) segment supplies value- for-money consumer goods in Botswana, South Africa and Zambia. Kamoso’s Mediland affiliate is one of the leading suppliers of medical products in Botswana.
RMB Ventures purchased a controlling interest in Kamoso in late 2017.
“We realised at the time of purchase we would like to bring in a value-add shareholder to aid our growth strategy in Botswana and the region,” said Aitken at RMB.
At BDC, Lebang said they are happy to be adding Kamoso to their portfolio; a company that will aid in their quest to build a resilient supply chain towards realizing food and health security for the nation as well as driving import substitution by significantly ramping up its existing and growing manufacturing business.
“We also look forward to leveraging off the networks of our co-investors in taking a home-grown business to the regional market, a key milestone in supporting BDC’s international expansion mandate,” she stated.