Commission’s ‘BEE’f with Burger King causes business borborygmi
In one of the most hotly debatable recommendations in recent memory the Competition Commission last week opened the Pandora’s box of public interest assessment conditions, which were inserted into the law via the Competition Amendment Act of 2018, when it ruled that the proposed takeover of Burger King by a US private equity fund be prohibited due to the lack of BEE in the new ownership structure. While the Commission found that the proposed transaction was unlikely to impact Competition in the country, it found that ”...the merger would lead to a significant reduction in the shareholding of historically disadvantaged persons in the target firm...”. If upheld at the Tribunal, this ruling could have significant implications for foreign direct investment/foreign investors looking to make acquisitions of SA entities, existing black shareholders, employment, and small to medium sized firms as suppliers. The case also raises questions about whether competition law is the right tool to advance the country's transformation agenda. Michael Avery spoke to Competition Commissioner, Thembinkosi Bonakele; Heather Irvine, Partner in Bowmans Competition practice; David Holland, founder of Fractal Value Advisors and author of Beyond Earnings; & Langa Madonko, SAVCA Director, Investment Principal, Investor Relations & Capital Raising at Summit Africa.