Source: Eyewitness News
The Competition Commission has, in what’s been described as a historic move, blocked the sale of Burger King SA by Grand Parade Investments.
It’s the first time that the commission blocked a merger purely on public interest grounds, according to the Competition Commission’s Tamara Paremoer.
She also said that regardless of the assessment on competition, there was legislation that required the commission to determine whether or not a transaction can be justified on public interest grounds.
“We found that this merger does not pass that threshold, so it has a negative effect because it does not promote a greater spread of ownership,” she said in an interview with Bruce Whitfield on 702.
It’s unclear if Grand Parade, one of the country’s oldest empowerment companies will challenge this decision in court. But the commission advanced its reasons, among them, the BEE credentials of the buyer, Emerging Capital Partners, were not good enough.
In response to the decision, BEE expert Safiyya Patel, a partner at Webber Wentzel, gave insights on what the commission’s decision could mean for black shareholders.
“The decision could limit the market these broad-based shareholders could now be selling their assets into, given that a black shareholder might not be in a position to sell the assets to non-black shareholders because of these public considerations, and that a potential merger might be blocked by the Competition Commission,” Patel told Whitfield.