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Ina Opperman It is the first time in 20 years that a merger may be prohibited on the grounds of public interest only. Picture: iStock
The move by the Competition Commission to formally block the sale of Burger King and Grand Foods meat plant to Pan-African private equity firm Emerging Capital Partners (ECP) because “the proposed merger cannot be justified on substantial public interest grounds”, is bad news for investment.
The commission recommended the Competition Tribunal prohibits the sale because the merger would significantly reduce the shareholding of historically disadvantaged persons (HDP) from more than 68% to 0%.
Ground-breaking recommendation
This “ground-breaking recommendation”, to prohibit the proposed sale by Grand Parade Investments of its investment in Burger King SA to a US private equity firm, will have s
‘It s quite ironic that a broad-based BEE grouping now is impacted by something which was put in place for broad-based BEE previously disadvantaged participants”: Bravura head of corporate finance Soria Hay.
The DA is deeply concerned by the actions of the Competition Commission to block the sale of Burger King in South Africa on “public interest” grounds. We are of the belief that these actions, which had nothing to do with competition issues and everything to do with racial bean counting, sets an incredibly dangerous precedent about how future sales of business will be conducted.
After the Competition Commission boldly stepped in to block the sale of Burger King SA to a private firm over “transformation issues”, concerns are growing that this move could set a dangerous precedent for future investment into South Africa.
The Competition Commission said on Wednesday that the proposed merger would lead to a “significant reduction in the shareholdings of ‘historically disadvantaged individuals’ (HDIs), taking this number down from 68% to 0%”, while also conceding that the move would have little impact on actual market competition.
Preventing Burger King sale ‘sets dangerous precedent’
Dean MacPherson, the DA’s Shadow Minister of Trade, Industry and Competition, said in a statement on Thursday 3 June that the move to block the acquisition of Burger King by ECP Africa – a private equity fund – constitutes no more than “racial bean counting”, and said that the decision sets an “incredibly dangerous precedent about how future sales