The Namibian Competition Commission (NaCC) has started discussing the proposed acquisition of Schwenk Namibia (Ohorongo Cement) by Whale Rock Cement (Cheetah Cement).
The two companies are the only manufacturers of cement in Namibia.
The deal involves Whale Rock Cement acquiring 100% share capital of Schwenk Namibia from Schwenk Zement International GmbH & Co KG.
Speaking during a consultation session on Thursday, director of mergers and acquisitions Johannes Ashipala said the NaCC is looking at whether the transaction would prevent or lessen competition in Namibia.
“This particular acquisition is a horizontal merger and this means there will be a complete removal of the competitor leaving only one option in the Namibian market,” he said.
Ashipala said the commission’s findings currently show that the acquisition could lead to Cheetah cement operating as a monopoly.
This may lead to the entity overpricing its products as it would be the only option on the market.
“We are also looking at whether the acquisition would affect public interest negatively such as employment, local ownership and industrial development,” said Ashipala.
Schwenk Namibia holds a 69.83% stake in Ohorongo Cement, with the remaining shares held by Industrial Corp South Africa 14.27%, Development Bank of Namibia (11.73%), and Development Bank of Southern Africa (4.17%).
