Competition Authority has approved the 100 percent acquisition of Bank of India by First Capital Bank Limited (FCBL) assuring that the acquisition will not result in lessening of competition in the banking sector and that there will be no job losses.
FCBL, is a company incorporated in accordance with the Laws of Botswana. FCBL is controlled by First Capital Bank plc Malawi; Everglades Holdings (Pty) Ltd, Botswana; Premier Capital Ltd, Mauritius; Prime Bank Ltd, Kenya; and members of the Anadkat Family.
The authority stated that the analysis of the facts of the case have shown that there are no substantial competition concerns that will arise in the market for the provision of commercial banking services.
“The proposed transaction is not likely to result in substantial lessening of competition due to market characteristics such as countervailing power and effective remaining competition that exists in the market under consideration,” states the Authority led by Tebelelo Pule.
According to the Authority the merger will not result in the merged entity attaining any dominant position in the market under consideration.However, the Authority also indicated that the acquisition takes note of public interest concerns under section 59(2) (e) of the Competition Act as it is envisaged that upon implementation of the proposed transaction, all local employees shall be absorbed by the acquirer.
Pule stated that taking the public interest concerns and pursuant to the provisions of section 60 of the Competition Act of Botswana, the Authority determined to approve the proposed acquisition of 100 percent issued and paid up ordinary shares of Bank of India by First Capital Bank Ltd on conditions that there shall be no retrenchments and all employees shall be transferred to First Capital Bank.
“However 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” she said.FCBL is a commercial bank, providing deposits, loans to corporates, individuals and Small Medium Micro Enterprises [SMMEs]. It operates a total of four branches and five loan centres across Botswana, specifically in Francistown, Gaborone, Kanye, Mochudi, Mogoditshane and Palapye. FCBL has two subsidiaries: Diron Ridge (Pty) Ltd and Jetwig Enterprises (Pty) Ltd; both of which are not in operation.
Bank of India is a company incorporated in accordance with the Laws of Botswana and a subsidiary of Bank of India; currently has one branch in Gaborone. The bank services includes deposits, loans and advances to corporate and retail customers.