Eight mergers of firms in third quarter of 2019

EIGHT company mergers were recorded in the country in the third quarter of last year, a slight increase from the second quarter, as the business sector seeks to come together to survive the economic challenges.

In its latest report, the Competition and Tariffs Commission (CTC) said the number indicated a 14 percent increase compared to the second quarter and a huge leap compared to 2018 where only four mergers were handled during the same period.

“The commission received eight mergers in the third quarter of 2019 as companies continue to amalgamate their operations.

There was a 14 percent increase in the number of cases notified between Q2 and Q3 of 2019,” the commission said.

According to CTC, many companies have shown an appetite to diversify operations to enjoy economies of scale.

This, CTC added, has also seen foreign firms extending their operations towards the country in a bid of dominate the international markets.

“A total of 65,5 percent of the mergers comprise Zimbabwean firms intending to expand their business and, in some instances, diversify their operations into various sectors of the economy.

A total of 37,5 percent were foreign firms largely from Mauritius and South Africa, acquiring local firms.

Foreign firms intend to upscale the product offering of the target firms by bringing in foreign skills transfer in areas such as manufacturing technology.”

CTC added that the biggest sector that contributed the most merger transaction was mining and quarrying which cashed in 25 percent of the transactions and the least contributors were wholesale and retail alongside transport and storage with 12 percent.

Some of the approved transactions during the quarter included the acquisition of South Africa’s retail giant Edcon selling its shareholding of one of their Zimbabwebased clothing chain Edgars to Mauritius incorporated company SSCG Africa Holdings.