The competition Tribunal yesterday has given the green light to Net1 Applied Technologies South Africa to acquire Ovobix and Luxanio 227 for R3.7 billion.
On October 31, 2021 the deal was announced.
Ovobix and Luxanio are investment holding companies, holding shares in two firms and do not carry out any other business activities. In South Africa, the target group provides services for, among others, automated cash management, card payment solutions, as well as VAS (prepaid and value added services) and unsecured short term business loans to the South African retail sector.
The Tribunal has said it has approved the proposed transaction subject to a set of conditions including the establishment of an employee share ownership programme ( ESOP) for the benefit of workers.
The Tribunal’s imposed conditions include a provision that Net1 Inc establish an ESOP for the benefit of workers of the merged entity to receive shareholding in Net1 Inc equal in value to at least 3 percent of the issued shares in Net1 Inc as at the implementation date of the proposed transaction, in accordance with certain ESOP design principles.
The Competition Commission, which investigates large mergers before referring them to the Tribunal for a decision, ultimately has concluded that the proposed transaction is unlikely to result in any competition concerns.
“The Tribunal has no reason to disagree with the Commission’s assessment and has concluded that the proposed transaction is unlikely to substantially prevent or lessen competition in any relevant market,” it has said, adding that the transaction will not result in any retrenchments.
There have been pre-merger retrenchments at Net1 SA due to operational reasons unrelated to the merger. Considering the current economic climate and South Africa’s unemployment rate, the merger parties have agreed to a condition for a 24-month period involving retrenched employees being given preference when vacancies become available in the merged entity within certain limitations.
BUSINESS REPORT ONLINE