Abstract
Cross-border mergers are increasingly common as businesses seek to expand and gain a foothold in their industries. While some mergers can be beneficial for businesses and the economy, others can impact competition by creating an entity with significant market power, which can lead to unilateral or coordinated anti-competitive effects. These merger effects are identified and prohibited by competition authorities, who evaluate mergers to assess whether they would have substantial lessening of competition (SLC). This study aims to compare merger reviews in Botswana, Namibia, and Eswatini to determine the need for a SACU merger regime. The study assesses cross-border merger effects between 2017 and 2021, and conducts an in-depth analysis of two selected merger cases – Heineken, Distell, and Namibia Breweries Limited (NBL) (Case Ref: MER/04/27/2022) and Premier FMCG and Mister Sweet (Case Ref: LM190Jan21). A qualitative analysis was undertaken, which included an assessment of primary data collected through semi-structured interviews, non-confidential case reports, and the compilation of a dataset with details of all mergers between 2017 and 2021 that raised cross-border issues. The data from competition authorities revealed that most cross-border merger cases originate in South Africa. Further, the results revealed that in all three jurisdictions in the period of interest all cross-border mergers were approved, with most approved without any conditions. The research has found that the national competition authorities (NCAs) are effectively identifying mergers with cross-border effects and assessing the competitive landscape of cross-border mergers through a comprehensive set of economic tools and analyses. However, the NCAs could collaborate more closely on the assessment of cross-border mergers and pay more attention to the potential regional effects of mergers. Overall, there is a strong case for establishing a SACU merger regime. A SACU merger regime would help to protect competition in all three SACU countries and reduce the regulatory burden on businesses. However, it is important to carefully consider the costs and benefits of a SACU merger regime, particularly as effective outcomes may be achieved through stronger bilateral or regional cooperation between the NCAs. The study contributes to the literature in understanding cross-border effects of mergers and how they should be evaluated, benefiting competition authorities, businesses, practitioners, and academics.
Keywords: National Competition Authorities (NCAs), cross-border mergers, merger reviews, regional integration, Southern African Customs Union (SACU), Substantial Lessening of Competition (SLC).