Competition Authority approves KFC And BIHL acquisitions

Callus (Pty) Ltd has been instructed to ensure that there are no job losses as a result of its acquisition of KFC franchise restaurants in Botswana. This was one of the conditions set by the Authority in its decision on10^th December 2015 in respect of the proposed acquisition of KFC franchise restaurants in Botswana, together with all the assets related to the operation of the KFC franchise stores of VPB Propco (Pty) Ltd by Callus (Pty) Ltd.

The Authority noted that although there are no substantive competition concerns that would arise in the market for quick-service or fast food restaurants, the transaction has raised some public interest concerns.

Callus was also instructed by the Authority to continue sourcing from the same suppliers that were engaged by VPB and are YUM Restaurants International (Pty) Ltd accredited, as well as consider sourcing from any other YUM accredited suppliers based in Botswana. Furthermore, it should demonstrate to the Authority efforts made towards facilitating that local suppliers penetrate or meet YUM Restaurants International (Pty) Ltd’s standards of accreditation. Callus iwas also mandated to annually (for a period of three years) submit to the Competition Authority, a detailed report indicating a list of its new and old Botswana based suppliers, as well as the progress it has made on the other conditions.

Callus (Pty) Ltd, the acquiring enterprise, is a company incorporated under the Laws of Botswana, and is a wholly owned subsidiary of Country Bird Holdings (Pty), a company incorporated under the Laws of South Africa.

Meanwhile, on 16^th December, the Authority also authorised unconditionally the proposed indirect acquisition of 50% of the shares in Botswana Insurance Company Ltd (BIC) through the purchase of shares in Teledimo (Pty) Ltd by Botswana Insurance Holdings Ltd (BIHL).

The Authority notes the merging parties’ intention to subsequently restructure BIHL Sure and consolidate it within the BIC portfolio. The Authority stated that the  approval was solely for the proposed acquisition of 50% shares in Teledimo (and indirectly BIC), and not the intended merger between BIHL Sure and BIC, which would have to be notified with the Authority in the event that the transaction meets the stipulated merger control thresholds.

BIHL, the acquring firm, is a public company listed on the Botswana Stock Exchange. BIHL directly owns and controls Botswana Insurance Fund Management Limited (BIFM) which is licensed as an asset management firm; Botswana Life Insurance Limited, which is licensed as a life insurer; and BIHL Insurance Holdings Ltd (BIHL Sure) which is licensed as a short-term insurance company, specialising in Legal Assurance.

Teledimo, the target firm, is the holder of 100% of the ordinary shares in BIC and is duly licenced as BIC controller in terms of the applicable laws. BIC is a general insurance company and its product portfolio includes personal and commercial lines.