ZIMBABWE – The Competition and Tariffs Commission (CTC) of Zimbabwe has reversed the acquisition of premier stock food manufacturer, Profeeds’ 49 percent shareholding by Innscor and directed the manufacturer to divest out of the company.
In addition, the competition commission has fined the conglomerate ZWL 40.6 million (US$1.6 million) representing a portion of Innscor’s turnover for 2018, for failing to notify the commission of the transaction in terms of the Competition Act.
The commission has also reversed the acquisition of Produtrade another agro-processing firm by Innscor.
Innscor owns 49 percent of Profeeds and Podutrade apiece, through its investment vehicle Ashram Investment Private Limited.
In a letter to Ashram, CTC director Ms Ellen Ruparaganda, said the transactions involving Profeeds, Podutrade and Ashram be reversed while Ashram should divest from Profeeds immediately, reports The Herald.
Profeeds and Produtrade were established by the Philp brothers in 2007 but due to capital constraints, Innscor bought the shareholding in the business and has since grown it exponentially.
This comes as recent reports by indicated that CTC had put a pause on Innscor’s plan of disposing its 25% shareholding in Capri, the largest refrigerator manufacturer in the country.
Innscor controls 50.1% in Capri through its investment vehicle Skitap while the remainder is held by Catterson Marketing.
Innscor intended to swap its 50.1% shareholding in Capri for 100% shareholding in Skitap. Further, Skitap would sell 0.1% of Capri to Catterson Marketing such that shareholding in Capri is equally divided between Catterson and Skitap at 50% each.
Thereafter, a Mauritius-based investment holding entity called SSCG Africa Holdings through its vehicle Annunaki Investment would acquire 50% of Skitap, thus acquiring indirect 25% shareholding of Capri.
Investigation into the deal was completed and after the CTC board convened recently, a unanimous decision to block the transaction was made on the basis that the involved parties failed to meet the requisite guidelines.
In 2018, CTC blocked NatFoods plan to merge with Profeeds under a structure that would have created African Feed Mills.
The transaction was part of eight mergers and acquisitions CTC either assessed or approved in the first half of 2018, including Tanzanian milling giant Bakhresa’s acquisition of a 100 percent stake in grain miller and feed stock producer Blue Ribbon.
Founded in 1987, Innscor operations include that of the light manufacture of fast moving and durable consumer goods.
Its light manufacturing business includes the operations of National Foods Holdings Limited, Colcom Holdings Limited, Irvine’s Zimbabwe (Private) Limited, Bakeries, Appliance Manufacturing, Natpak (Private) Limited, Profeeds (Private) Limited and Probrands (Private) Limited.
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