Non-compliance with Namibia’s merger laws can lead to penalties, delays in merger implementation, prohibition, or even dismantling of an unlawfully implemented merger altogether. In this regard, upholding the integrity of domestic merger provisions is crucial for maintaining a competitive market environment in Namibia, fostering economic growth, and protecting consumer welfare.  

This was stated yesterday by the Namibia Competition Commission (NaCC) reiterated that continued vigilance and enforcement by the commission are essential to deter non-compliance and ensure mergers are conducted in a manner consistent with the principles of fair competition.

“Therefore, adherence to the merger provisions of the Namibian Competition Act is crucial for businesses operating in Namibia. Businesses must prioritise merger compliance to avoid legal repercussions, uphold their reputation and integrity, and ensure fair market practices,” read the statement from NaCC spokesperson, Dina //Gowases. The statement added that the commission welcomes public feedback on changes in business operations, clarifications on matters handled by the commission, and non-compliance with conditions.

//Gowases further pointed out that Namibia’smerger control provisions serve as a vital mechanism for maintaining competitive markets and protecting consumer welfare. She noted these provisions empower the NaCC to examine proposed mergers and acquisitions that could potentially reduce competition. 

Namibia’s competition legislation requires notification if businesses contemplating a merger have a combined asset value or turnover exceeding N$30 million, and the target or transferred business’s asset value or turnover exceeds N$15 million.

//Gowases explained that a merger notification triggers a comprehensive assessment of the likely impact on competition and public interest considerations to determine whether a merger is likely to substantially prevent or lessen competition in any relevant market in Namibia. The NaCC’s evaluation typically involves analysing factors such as market share, concentration levels, potential barriers to entry, and the likelihood of coordinated conduct among market players post-merger. The commission also looks at public interest considerations such as the effect the merger will have on an industrial sector or region; employment; the ability of small and medium businesses or firms controlled or owned by historically disadvantaged persons to enter, participate in, or expand within the market effectively; and the national industry’s ability to compete internationally. It also analyses the benefits likely to be derived from the merger, including those related to research and development, technical efficiency, increased production, efficient distribution of goods or provision of services, and access to markets. 

“At the end of the assessment, the commission may give unconditional approval of the merger, where a merger is found not to raise any competition or public interest concerns. The commission may also prohibit the merger entirely, where it is found to raise significant competition concerns which cannot be remedied. Finally, where a merger is found to raise foreseeable competition or public interest concerns that can be remedied, the commission may impose conditions to mitigate such anti-competitive effects or public interest concerns. These conditions may be structural, involving alterations to the market structure, such as divestiture, or behavioural, focusing on modifying the behaviour of the merging businesses,” //Gowases stated. 

Divestiture involves the sale of assets or subsidiaries by a company found to substantially lessen or prevent competition. This measure aims to restore competition in a market where it would have otherwise been significantly lessened or eliminated because of a merger, leading to a less competitive market structure, such as a monopoly or duopoly, which has the potential to facilitate anti-competitive behaviour such as collusion.

Moreover, behavioural conditions directly address potential anti-competitive conduct or deal with actions that negatively affect competition. These often involve specific obligations or prohibitions imposed on the business, such as price caps, which prevent a dominant firm from charging excessively high prices; non-discrimination clauses, which require a business to treat all customers equally; market access conditions, which mandate that a business provides access to essential facilities or infrastructure to its competitors; and employment which mandate that a business retain employees to avoid job losses.

A competitive economic environment helps consumers in the long run by reducing prices, improving quality, and encouraging new ideas (promoting innovation).