Botswana’s Competition Authority has given Sun International the green light to go ahead with the acquisition of Peermont Group. The merger has been approved on the condition that the two groups “will not be involved in mapping business strategy for the local casino operations,” according to mmegionline media resource.
“Although there are competition concerns that will arise with respect to the 3-4 star grading short-term accommodation and hotel facilities market, they are less likely to result in substantial lessening of competition, as the market under consideration is highly contested,” noted the chief executive officer of the Competition Authority, Thula Kaira. “However, the Authority’s analysis highlights the potential competition concerns which could arise in the casino and gaming market, due to the proposed transaction, given that it results in a reduction in the number of players in Gaborone and Francistown.”
In 2014, Sun International pulled its interests out of the Gaborone Sun except for its stakes in the casino. The approval of its acquisition of Peermont Group essentially means that Sun International will own all the casinos in Francistown, as well as two out of the three existing ones in Gaborone.
At present, Peermont Group owns Gaborone International Convention Center in the Grand Palm Hotel, Casino and Conference Center, as well as the Peermont Metcourt Inn Hotel and the Sedibeng Casino, both of which are located in Francistown.
In order to address concerns of market dominance, the Competition Authority ruled that Sun International has six months to make sure that they are only involved in the day to day running of the casinos, and will not make any decisions that are strategically important.
In addition, the authority ruled that none of its employees from its casino operations will be employed simultaneously within the operations of any Botswana based Peermont casino. “All employees within the SIB and Peermont casinos in Botswana are subject to appropriate non-disclosure undertakings,” said the Competition Authority.
An independent consultant will be called upon to provide detailed annual reports regarding the execution of the conditions set out by the Competition Authority.
In a statement issued recently, the Competition Authority’s Communications and Advocacy Manager, Gladys Ramadi said that any concerns regarding the acquisition are less likely to seriously impact competition, however concerns have been highlighted and conditions set in place to prevent problem areas.
“There are no potential effects of the proposed transaction on the market structure as well as on consumer welfare,” she said.