SAA
The Competition Commission said it had approved the proposed merger between Takatso Aviation and South African Airways.
Commission spokesperson, Siyabulela Makunga, said on Friday that the parties also agreed to divestiture and employment conditions, which was initially rejected.
He said the recommendation followed the Commission’s investigation into the large merger notification received last June, in which the Takatso Consortium intended to acquire 51% of the issued share capital of SAA from the government, with the remaining share held by the Department of Public Enterprises.
“If the merger is approved by the Tribunal, the remaining 49% shareholding in SAA will be retained by the DPE,” he said.
Makunga said the divestiture conditions were put in place out of concern of a potential conflict of interest with respect to Takatso’s minority shareholders, Global Aviation Operations PTY LTD, and Syranix PTY LTD
“Of relevance to this merger assessment is Harith’s investment in Lanseria Airport. Global Aviation leases aircraft and also owns and operates the domestic passenger airline known as ‘Lift’,” he said.
Makunga said Syranix co-owns the Lift trademark but does not hold a domestic passenger airline operator’s licence.
“Syranix provides airlines such as Lift with management support services including commercial, customer support, branding, and associated activities.”
He said the Commission found that the merger is likely to result in a substantial lessening and prevention of competition in the domestic passenger airlines market.
"The Commission found that the merger is likely to result in a substantial lessening and prevention of competition in the domestic passenger airlines market. That is because the merger will likely facilitate the exchange of competitively sensitive information between SAA and Lift, through Global Aviation and Syranix having shareholding and the ability to appoint directors to Takato's board of directors."
To remedy this concern, the Commission and the parties have now agreed to a divestiture condition in terms of which Global Aviation and Syranix will completely divest from Takatso prior to the merger’s implementation.
"The Commission considers that this ‘fix-it-first’ remedy is appropriate in the circumstances given the extent of the competition concerns identified," Makunga said.
