Lewis Ellerines take-over approved with conditions
The Namibian Competition Commission has approved the proposed take-over by Lewis Stores Namibia of Ellerines Furnishers and Ellerines Retail trading as Bears and Ellerines.
At the beginning of April, the CEO of the commission, Mihe Gaomab II announced they received notification in November last year of the proposed sale of the retail business of Ellerines Namibia (Beares” and Ellerines) as a going concern to Lewis Stores Namibia (Pty) Ltd. The deal involves 21 stores.
Gaomab said the proposed transaction is the result of a Board resolution taken on 7 August 2014 to voluntarily commence business rescue proceedings under the South African Companies Act following a decision by African Bank Limited, Ellerines’ parent company to stop funding.
In terms of the business rescue process, once a business is in receivership the business rescue practitioners assume full management control of the company. They are also required to investigate the affairs of the company and attempt to raise post-commencement finance to keep the business running.
Ellerines’ business in South Africa was then acquired by Lewis Stores but the deal awaited regulatory approval in Namibia.
In this regard, subsequent to the South African purchase of the Bears Division in December 2014, and after a rigorous bidding process, Lewis was the successful final bidder for the operations in Namibia, Botswana, Lesotho and Swaziland. Lewis was the only party that agreed to take all assets, all the staff and all the stores in the four countries.
Gaomab said the commission found that although the merger will reduce the number of competitors , the proposed merger is unlikely to substantially prevent competition post merger or result in any undertaking abusing its dominance in the market. “To the contrary, by rebranding Ellerines stores into Beares, the proposed merger will increase competition by enabling Lewis Namibia through the Beares brand to enter and compete in the higher income market segment.”
The proposed transaction was further found to have no negative impact on employment. Ellerines employs 259 people who will all keep their jobs. The commission stipulated a number of conditions for the merger, foremost of which are the safeguarding of employment.