Competition Authority has conditionally approved the acquisition of electronic company, Wabler Holdings by Blue Hearts Holdings which is owned by Choppies Chief Executive Ramachandra Ottapathu.
This follows a heated debate by retail giants against the acquisition. In a statement released this week, Competition Authority Acting Chief Executive, Tebelelo Pule said the proposed transaction is not likely to result in the prevention or substantial lessening of competition or endanger the continuity of the services offered in the distribution of branded consumer electronics to resellers.
“The market structure in the distribution of branded consumer electronics to resellers will not be altered as the acquiring entity will be inheriting the position of the target enterprise,” stated Pule.Wabler Holdings is a holding company for IT4Africa (Pty) Ltd, Goldtech (Pty) Ltd, Healthwest Africa (Pty) Ltd and Solid Logistics (Pty) Ltd. It is registered in Botswana. Last month major retailers raised their concerns to the Competition Authority that the proposed acquisition should not be allowed as it will result in harm to the retail industry because the buyer who is the director of the largest retail shop, Choppies might influence the affairs of Wabler Holdings and its dealings with its customers which include Sefalana.
Currently Sefalana procures a wide range of products from the targets. The brands include Samsung and Hisense. Sefalana also has a Samsung store in two of its stores where a large range of Samsung products are sold in its flagship store and is supplied by Wabler Holdings.
Pule stated that Bluehearts will continue to supply the same retailers that were previously supplied by Wabler Holdings on terms not less favourable to those offered by Wabler Holdings to the retailers before the merger. Bluehearts is also ordered to annually, for a period of five years from the implementation date, submit a detailed report to the Authority indicating a list of its new and old customers and the trading terms referred to in (a) above. The report is to be compiled by an Independent Consultant approved by the Authority and Bluehearts (Pty) Ltd shall bear the costs of engaging such a Consultant. Warbler Holdings shall in two weeks after the decision date, submit a detailed list of Warbler Holdings current customers and trading terms to the Authority.
However, Ottapathu has been asked to divest his interests in other six companies which include Montrose Investments t/a RiteFurn; Callao Ltd t/a RiteFurn; Peardale (Pty) Ltd t/a RiteFurn; Decolite (Pty) Ltd t/a RiteFurn; and Mont Catering and Refrigeration.“In addition, for a period of five (5) years from the implementation date, Mr. Ottapathu should not either as a principal, agent, partner, representative, shareholder, director, employee, consultant, advisor, financier, or in other like or similar capacity, directly or indirectly be associated with, interested or engaged in any firm, business, company or other association of persons which carries on a business activity similar to the business carried on by the companies listed above,” states Pule.