The Namibia Competition Commission (NaCC) has approved the acquisition of Gasit by Vivo Energy Namibia Limited under conditions.
The Board of Commissioners approved the proposed merger on the 10th of August 2023. According to NaCC’s Corporate Communications Practitioner Dina //Gowases, the Commission’s decision is based on the grounds that the proposed merger is likely to prevent or lessen competition in Namibia, as envisaged by Section 47(2) of the Competition Act No. 2 of 2003.
“The implementation of the proposed merger points to the fact that the merged entity is highly likely to materially change the parties’ economic incentives to engage in anticompetitive behaviour that could harm competition by engaging in foreclosure strategies and raising rivals’ costs, due to their dominance, lack of regulation of the LPG market and merging parties’ geographical reach,” she said.
NaCC set firm conditions for the agreement which include, no retrenchments of the 21 employees employed by the seller’s business are allowed for a minimum of three years from the transaction’s effective date.
NaCC further ruled that “the Supplying Entity must provide Namibian Liquified Petroleum Gas (LPG) customers operating at the level of the Target Undertaking with LPG on an arm’s-length basis, following the same terms and pricing methodology as the Target Undertaking.”
Furthermore, in cases of LPG shortages in the Namibian market, the target undertaking or the supplying entity must supply Namibian competitors following the same principles.
These conditions will undergo a five-year review for potential adjustments.
Vivo Energy Namibia’s merger would enable it to expand its presence in the LPG market, encompassing both downstream retail sales and upstream bulk supply through Vitas Gas, a subsidiary of Gasit.
Triple J, using the trade name ‘GasIt’, is a 100% Namibian LPG bulk and cylinder distribution company and has been operating as such since 2012 (i.e., the GasIt Business). The GasIt Business is focused on supplying LPG safely and cost effectively to all sectors of the market.
