Botswana’s Consumer and Competition Authority has unconditionally approved the proposed acquisition of 100% of the issued share capital and all sale claims of MTN Business Solutions Botswana by Mascom Wireless Botswana, the country’s leading mobile telecoms company.
The transaction was first notified to the Authority on the 8th February 2023, and the merger assessment was completed on 15th June 2023.
The announcement was made by the Chief Executive Officer of the anti-trust body, Tebelelo Pule. “However, as stated under section 61 of the Act, this approval does not override or negate any other mandatory statutory approvals or processes that any of the parties to this merger must comply with under the Laws of Botswana,” noted Pule.
Mascom is majority owned by DECI Investments (60%) and Econet Wireless (40%). In turn, DECI Investments is 66.66% owned by Botswana Public Officers Pension Funds and the other 33.33% belongs to Mobile Botswana, which is a subsidiary of MTN International, which is in turn indirectly wholly owned by MTN Group Limited. “The merger would result in the Merged Entity attaining dominant position in the market under consideration, however the dominance is not as a result of the merger, it’s a pre-existing position on behalf of the Acquiring Entity,” said Pule when making the rulling. ‘The merger would not enhance the Merged Entity’s ability to abuse dominant position because there will be no incentive to engage in input foreclosure post-merger’
In making the assessment of the merger, the Authority looked at the fact the proposed transaction will result in the Merged Entity acquiring a market share which is significantly below the dominance threshold of 25%. Therefore, it is unlikely for the merger to enhance or give the merged entity any market power. Post-merger the Merged enterprise will continue to have larger players such as Botswana Telecommunications Corporation Limited and Orange Botswana posing a competitive constraint.
