The Competition Tribunal of South Africa has given its approval for the proposed merger between South African Airways (SAA) and Takatso Aviation Proprietary Limited, with divestiture and employment conditions. Takatso Aviation will acquire a 51% stake in SAA, while the Department of Public Enterprises (DPE) will retain a 49% shareholding.
Takatso minority shareholders will be forced to divest from the transaction.
The Department of Public Enterprises (DPE) has formally accepted the Tribunal's decision to approve the merger, recognizing it as a significant step in the government's efforts to boost SAA’s balance sheet.
It allows Takatso and the DPE to proceed with their transaction and finalize other essential regulatory requirements to conclude the merger. The state hopes that this part privatization will turn SAA into a profitable and reliable carrier capable of competing in the domestic and international markets.
Pravin Gordhan, minister of public enterprises said: “With this decision, the Competition Tribunal has affirmed our belief as the government that a revitalized and well-capitalized SAA presents the country with significant opportunities to boost economic connectivity and strategic reach that should benefit our economy and our people for years to come."
"I am confident that the repositioning of SAA sets a very good example of what can be achieved when the right financial and operational framework is given to state-owned companies, so they can fulfill their mandate to advance our economic transformation and development as a country,” Gordhan added.
Following the Tribunal's decision, Takatso Aviation will acquire 51% of the issued share capital of SAA from the South African government, while the DPE retains the remaining 49% shareholding.
Takatso Aviation was incorporated for this merger, with Harith General as the majority shareholder. The minority shareholders are Global Aviation t/a Global Airways and Syranix, both involved in South Africa's low-cost carrier, LIFT.
When the Commission recommended the merger to the Tribunal, it cited the possible implications of the deal on competition in the domestic passenger airline sector. The transaction's approval is now subject to the condition of the complete divestment of Global Aviation and Syranix from Takatso prior to implementation. The minority shareholders agreed to withdraw from the transaction last month.