For the first time in 20 years, a merger may be prohibited on public interest grounds alone. A ground-breaking recommendation by the Competition Commission (Commission) to the Competition Tribunal (Tribunal) to prohibit the proposed sale by Grand Parade Investments Limited (GPI) of its investment in Burger King (South Africa) to a US private equity firm will have severe consequences for the future of M&A transactions and investment into South Africa. The case also raises questions about whether competition law is the right tool to advance the country s transformation agenda.
On 1 June 2021, the Commission recommended that the transaction whereby ECP Africa, a private equity fund, proposed to acquire Burger King (South Africa) and Grand Foods Meat Plant (Pty) Ltd (Grand Foods) from GPI be prohibited. The Commission found that the merger would significantly reduce the shareholding of historically disadvantaged persons (HDP) in the target firm, from more than 68% to 0%.
A ground-breaking recommendation by the Competition Commission to the Competition Tribunal to prohibit the proposed
sale by Grand Parade Investments Limited of its investment in Burger King SA to a US private equity firm could have far-reaching a far-reaching impact onr
the future of M&A transactions in South Africa, say Robert Wilson and Shawn van der Meulen.
On 1 June 2021, the Competition Commission
recommended that the transaction whereby ECP Africa, a private equity fund,
proposed to acquire Burger King South Africa and Grand Foods Meat Plant from GPI be prohibited. The Commission found that the merger
would significantly reduce the shareholding of historically disadvantaged
‘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.
Grand Parade Investments was dealt a major blow yesterday after the Competition Commission shot down a deal, whereby Emerging Capital Partners, intended to acquire Burger King SA and Grand Foods Meat Plant from the investment holding company.