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Zimbabwe – developments in merger control

23 June 2020
– 2 Minute Read


On 5 June 2020, the Minister of Trade and Commerce, in consultation with the Competition and Tariff Commission (CTC), issued regulations amending the financial thresholds for mandatory merger notification in Zimbabwe (Regulations).

In terms of the Regulations, a merger is now notifiable if at the end of the immediately preceding financial year, the merging parties’ combined annual turnover in or from Zimbabwe, or combined gross assets in Zimbabwe, (whichever is the higher) equals or exceeds 10 million Zimbabwean Dollars (ZWD). This value is the equivalent of USD 27 632 or ZAR 477 658 when converted at the prevailing exchange rates on 21 June 2020.

Prior to the amendment, a merger was notifiable in Zimbabwe if the combined annual turnover or gross asset value of the merging parties equalled or exceeded USD 1.2 million. The Regulations effectively lower the thresholds for mandatory notification.

Whilst the merger filing fee in terms of the Regulations remains unchanged at 0.5% of the merging parties’ combined turnover or assets (whichever is the higher), the minimum filing fee payable has been adjusted to ZWD 100 000 (USD 276 or ZAR 4 777) and the maximum fee is ZWD 800 000 (USD 2 211 or ZAR 38 213).

In other developments, the CTC recently prohibited a merger in terms of which Innscor Africa Ltd (Innscor) sought competition authority approval for its acquisition of control over Profeeds (Pvt) Ltd (Profeeds) and its sister-company Produtrade (Pvt) Ltd. The merger was implemented in 2015, but only notified to the CTC in 2019.

The merger notification regime in Zimbabwe is suspensory, and in terms of the Competition Act [Chapter 14:28], parties to a notifiable merger are obliged to notify the CTC ahead of implementation. Failure to notify and/or pre-implementation thereof, attracts an administrative penalty of up to 10% of one or both offending firms’ annual turnover in the preceding financial year.

In Innscor¸ the CTC found that the merger gave rise to a substantial lessening of competition in the market for the supply of animal feed and day-old chicks, where Profeeds is operative. In addressing the competition law effects of the merger and the pre-implementation contravention, the CTC issued an order prohibiting the merger, and requiring Innscor to divest of Profeeds. The CTC also ordered Innscor to pay a penalty of ZWD 40 591 483 (USD 112 162 or ZAR 1 938 890), representing 6.43% of Innscor’s annual turnover for the year ended 2018.