The Competition Authority has conditionally approved the acquisition of Ellerines Furnishers and Ellerines Retail by Lewis Stores Botswana, as the transaction will result in 49 people losing their jobs.
Lewis Stores Botswana operates in furniture retail industry with 12 outlets in Botswana. Lewis Stores Proprietary Limited in South Africa controls the furniture store. Ellerine Furnishers Botswana and Ellerine Retail Botswana are both incorporated under the laws of Botswana and controlled by Ellerine Services Proprietary Limited, which is in turn wholly owned and controlled by Ellerine Furnishers Proprietary Limited.
The target enterprises operate a total of 25 stores trading as Ellerines and Beares in Botswana. The shops sell lounge furniture, dining room furniture, bedroom furniture, bedding, beds, mattresses and kitchen furniture appliances.
Competition Authority has approved the acquisition conditionally given the fact that there are competition concerns that will arise with respect to the retailing of household furniture and appliances market but they are less likely to result in substantial lessening of competition, as the market under consideration is contested.
According to the statement from the Authority signed by the Chief Executive, Thula Kaira, all employees employed in the Bears and Ellerines stores that are assigned at the implementation date will transfer to Lewis Botswana on terms and conditions that are on the whole and not less favourable to those on which were employed by the Bears and Ellerines businesses of Ellerines Botswana.
“There is a significant issue of public interest identified in relation to the provisions of section 59 (2) in that the transaction provides an opportunity to preserve 230 jobs, currently faced with an imminent retrenchment,” The Authority has approved the acquisitions under the conditions that there shall be no redundancies without the consent of employees of the merging parties as a result of the proposed transaction.
However the authority also states that this condition does not prevent Lewis to retrench employees or close stores when they are not economically viable.
“However this does not prevent Lewis Botswana, in the ordinary course from retrenching employees as a result of changes to its Lewis Botswana’s operational requirements, including store closures when such stores are not economically viable,”The authority also- states that Lewis shall invite retrenched employees whenever making new appointments on any created positions or any other positions that may become available for a period of 12 months from date of approval of transaction.
Lewis is also expected to harmonise the employment terms and conditions of employees employed in the Bears and Ellerines stores with the employment terms and conditions of Lewis Botswana.