Africa-Press – Uganda. The Comesa Competition Commission has “approved without condition” a share purchase in which Africa Capitalworks is seeking to buyout Cipla from Quality Chemical Industries.
The share purchase, in which Cipla will dispose of its entire 51.18 percent stake in Cipla Quality Chemical, was first announced in April and had been expected to be completed in May.
However, the transaction has delayed for more than four months due to regulatory approvals, particularly from Capital Markets Authority (CMA) and the Comesa Competition Commission, where Africa Capitalworks had sought permission to promote regional self-sufficiency by backing one of the largest lifesaving drugs manufacturers in sub-Saharan Africa through accelerating its growth both in Uganda and the region.
“… the [Committee Responsible for Initial Determination] determined that the merger is not likely to substantially prevent or lessen competition in the Common Market or a substantial part of it, nor be contrary to public interest,” Dr Mahmoud Momtaz, the chairperson of a three-man Committee ruled, noting that the Committee had further determined that the transaction was unlikely to negatively affect trade between member states.
In a July notice, Comesa had invited stakeholders, including competitors, suppliers and customers of the parties from within and beyond the region to give their opinion on the proposed acquisition of sole control by Africa Capitalworks of Cipla Quality Chemical.
Comesa, under the rules on Determination of Merger Notification Thresholds and Method of Calculation of 2015, examines mergers or acquisitions to avoid circumstances or creating anti-competitive mergers.
The Comesa Competition Commission had sought to understand whether the acquisition would not disabilise or tilt the market in Africa Capitalworks’ favour, given that the company will remain active among Comesa member states of Uganda, Zambia and Kenya, where it has market shares in the pharmaceutical markets of approximately or less than 15 percent.
In August, people familiar with the matter had indicated that the takeover deal, estimated at between $25m (Shs93.3b) and $30m (Shs112b), would require extension of the transaction date for the third time to allow Comesa complete its investigations before granting regulatory approvals in a deal in which Cipla would dispose of its 51.18 percent stake in Cipla Quality Chemical held through Cipla (EU), and Meditab Holdings.
Wholly exit
The deal will see Cipla wholly exit drug manufacture company Quality Chemical, which it acquired in 2015.
The Capital Markets Authority indicated in August that it had already approved the transaction in April.
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