Takatso Consortium is set to acquire 50% stake in South Africa Airways after receiving a nod of approval from South Africa’s Competition Commission. The Department of Public Enterprises (DPE) will retain the remaining 49% of the airline.
The Competition Commission investigated the acquisition terms and conditions for 11 long months an approved the deal on the condition that Takatso will retain minimum number of employees.
“Takatso will have access to SAA’s competitively sensitive information by virtue of its majority stake in SAA, pursuant to the proposed merger. This concern is further exacerbated by the fact that the domestic passenger airlines market is highly concentrated, barriers to entry are high and is amenable to coordinated effects,” the authority said.
The commission found that the merger is likely to result in a substantial lessening and prevention of competition in the domestic passenger airlines market as the merger will facilitate the exchange of competitively sensitive information between SAA and Lift, through Global Aviation and Syranix having shareholding and the ability to appoint directors to Takato’s board of directors.
To remedy that situation, the authority added a condition that includes starting a process to allow some shareholders in the consortium to exit the deal in the spirit of fair competition in the domestic airline.