Ohorongo Cement, WhaleRock merger blocked

THE Namibian Competition Commission (NaCC) has prohibited the acquisition of Ohorongo Cement by Whale Rock Cement.

The commission made the announcement on its website yesterday.

It says its decision is based on the grounds that the proposed merger is a move from a duopoly to a monopoly, with significant unilateral effects specifically but not limited to the removal of an effective competitor.

“The on-existence of countervailing buyer power, and a lack of import competition. The aforesaid is highly likely to render the merged undertaking market power, thereby significantly impeding effective competition by enabling the merged entity to act independently of market forces, with the likely outcome being higher prices, reduced output and quality, and limited choice for downstream customers with negative ripple effects on the entire value chain, including but not limited to increased cost of housing and infrastructural projects and the economy at large,” the NaCC explains.

The announcement further says the transaction was found to be likely to substantially lessen or prevent competition in the relevant market.

The NaCC also says the secretariat is of the considered view that the implementation of the proposed merger is likely to lead to a negative effect on employment due to job overlaps.

“In addition to the likely anti-competitive effects of the merger, there is a real risk that post-merger strategies may be employed that diminish the fiscal contributions currently realised by the government, thus undermining public interest outcomes in the long term,” the commission notes.

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