Mid-sized firms’ mergers dominate FCC activities in past five years

13Jul 2020
Francis Kajubi
Dar es Salaam
The Guardian
Mid-sized firms’ mergers dominate FCC activities in past five years

Eighty percent of activities handled by Fair Competitions Commission in the past four years were mergers and acquisitions submitted mostly by mid-sized companies owned by local entrepreneurs.

FCC’s Director General, Dr John Mduma speaking at a past event. File Photo.

Addressing journalists at the ongoing 44th Dar es Salaam International Trade Fair, FCC’s Director General, Dr John Mduma said the commission approved such requests submitted by owners. Without disclosing how much were the deals worth, Dr Mduma said a record 274 merger applications mostly from locally owned companies were received during the period.

 “This trend by local companies is a good message that the economy is growing because policies kept in place are favorable to such developments,” he said. He also noted that the increase in mergers threshold also contributed to the results. It should be remembered that the commission increased the merger threshold from 800m/- to 3.5bn/- in late 2017,” the FCC chief stated.

According to him, the received applications during the period were 17 from the agriculture sector, five in mining, 26 were manufacturing industries, 36 were banks and insurance companies, 45 were energy companies, 22 were in the processing of food and soft drinks, 14 in tourism industry, 38 were in the communication sector, 12 construction companies, 12 were also health companies while 47 applications were from other sub-sectors.

He pointed out that the commission approved 214 merger applications without conditions; 39 were under specific conditions; one application was rejected while 20 are still under verification process.

“The rejected one contravened the Fair Competition Act No.8 of 2003 which states that a merger is prohibited if it creates or strengthens a position of dominance in a market,” Dr Mduma added.

During the period, the FCC also worked on a consumer protection strategy which led to the commissioning of the Standard Form Consumer Contracts Regulations of 2014. The regulations came into effect in January 2016 hence the commission successfully abolished draconian rules that are in contracts prepared by service providers and producers to their consumers especially those in the financial sector.

The commission also conducted investigations in the microfinance sector that covered 193 companies from five economic zones namely central, southern highlands, south, north and lake zones. The investigations were aimed at addressing consumer complaints.

The FCC chief also revealed that in fighting counterfeits and sub-standards smuggled into the country, the commission conducted impromptu inspections of 29,529 containers from which 987 were found to be loaded with counterfeits.