Johannesburg - Bidvest Group has agreed to pay a R2 million rand settlement for taking over the control of Adcock Ingram before the merger of the two companies was approved by the Competition Tribunal.
Bidvest did not admit guilt, but said it agreed to the settlement to avoid protracted and expensive litigation. "In order to avoid protracted and expensive litigation, the respondents have, without admitting guilt, reached a settlement with the Competition Commission.
The settlement has been confirmed by the Competition Tribunal."As part of the settlement, the respondents have agreed to pay a settlement amount of R2 million and to develop, implement and monitor a competition law compliance programme for senior management and directors."
In April 2014, Bidvest Group's wholly owned subsidiary, BB Investment, notified the Commission of its intention to acquire shares it does not already own in drug maker Adcock in a deal worth US$515 million, or around R6 billion.
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Adcock is South Africa's second-largest drug maker and has the largest share of the country's over-the-counter medicines. Bidvest, a conglomerate with businesses ranging from food service to auto show rooms, already owns 34.5 percent of Adcock. It wanted to acquire more of a stake in a bid to build a big presence in the pharmaceutical market.
When the Competition Commission investigated the merger, it found evidence that suggested that Bidvest may have acquired control of Adcock prior to obtaining approval from the Tribunal. The Commission stalled the deal in order to first assess the public interest factors, the effects of the transaction and the competition effects.
The merger was then improved in August that year, with the Tribunal noting that Bidvest may have acquired control over Adcock prior to obtaining approval. The Competition Commission then also referred this complaint to the Tribunal in December 2015 for possible contravention of the Competition Act, as amended, by pre-implementation of a merger.
A settlement has now been reached in respect of a complaint referral to the Competition Tribunal by the Competition Commission.
AFRICAN NEWS AGENCY