New merger laws in South Africa have a huge problem: experts

The Competition Commission has published a revised draft merger assessment public interest guidelines for public comment, but there are serious problems for black-owned businesses.

“In 2019, the Competition Act was amended with the critical aim of remedying high levels of concentration, racially skewed ownership, and lack of support for small businesses. However, an inconsistent approach in assessing the amended statutory public interest factors has caused controversy.” This pertains to all South African mergers, including foreign-to-foreign mergers with no transacting company domiciled in South Africa.

“When HDP transactions are proposed to promote ownership in terms of section 12A, they ‘should be no less than 25% + 1 share and should ideally confer control on the HDPs.'”The experts warned that there are problems for black-owned businesses, especially black private equity firms, “In some cases, a merger’s value creation for HDPs offsets the decrease in HDP shareholding, but the Guidelines don’t appear to give credits for that.

Singapore Singapore Latest News, Singapore Singapore Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

South Africa: Academy for Young Winemakers Aims to Diversify South Africa's Wine Industryitemprop=description content=One of the world's top 10 wine producers, South Africa owes some 9 percent of its GDP to the wine sector - but the industry remains dominated by the white minority. A training academy for young South Africans from disadvantaged backgrounds aims to change that.
Source: allafrica - 🏆 1. / 99 Read more »