The Competition and Consumer Protection Commission (CCPC) has confirmed that they have not yet approved the transaction between Huaxin Investment Company Limited and Lafarge Zambia Plc as the case is still under review. Lafarge Zambia still has a pending case with the Competition and Consumer Protection Tribunal – CCPT.
Lafarge Zambia together with Mpande Limestone (Sinoma Cement) and Dangote were ordered by the CCPC Board to slush down their retail prices and revert to pre-cartel prices following an investigation that found the three firms gilty of acting and forming a cartel.
The proposed transaction is such that, Huaxin is purchasing 50.10% and 24.90% shares in Lafarge from Pan African Cement Limited and Financière Lafarge SAS respectively. This will culminate in the acquisition by Huaxin of 75% shares in Lafarge Zambia.
CCPC public relations officer Rainford Mutabi confirmed in an interview with the Zambian Business Times-ZBT that the commission was still reviewing the proposed merger involving the two companies and would communicate if the approval is granted.
“The Commission has not yet made any approval to the transaction between Hauxin Investment Company Limited and Lafarge Zambia Plc. This is because the case is still under review and as such, further information will be communicated if approval of the transaction is granted,” Mutabi said.
The Commission is calling for stakeholder views on the proposed merger involving Huaxin (Hainan) Investment Company Limited (“Huaxin” or the “Acquirer”) and Lafarge Zambia Plc (“Lafarge” or the “Target”). Some stakeholders have expressed concerns that Lafarge May have sold out to escape the fines that were meted in the company by CCPC.
Huaxin is a limited liability company incorporated in the People’s Republic of China. Lafarge is a public limited company, incorporated under the laws of Zambia and listed on Lusaka Stock Exchange.
On the other hand, the Competition and Consumer Protection Tribunal (CCPT) is yet to make its ruling in the cartel case, which involved Lafarge Zambia Plc, Mpande Limestone Limited and Dangote Cement Zambia Limited.
The board of directors of CCPC in March this year fined Lafarge Zambia Plc and Mpande Limestone Limited 10% of their annual turnovers for the year 2019 and another 10% of their 2020 annual turnovers for price fixing and division of markets, while Dangote Cement Zambia Limited was granted full leniency for having cooperated with the Commission during investigations.
However, Lafarge Zambia Plc appealed the decision by the Commission to the Competition and Consumer Protection Tribunal – CCPT. “You may wish to know that the CCPT is yet to make its ruling in the cartel case which involved Lafarge Zambia Plc, Mpande Limestone Limited and Dangote Cement Zambia Limited.
However, CCPC Board of Commissioners only granted full leniency to Dangote Cement Zambia Limited for having cooperated with the Commission during investigations,” Mutabi said.
The board of commissioners of CCPC ordered Lafarge Zambia Plc, Dangote Cement Zambia Limited and Mpande Limestone Limited to revert to the pre-cartel prices ranging between USD 4.50 – USD 5 for a period of one year from the date of receipt of the Board Decision pursuant to Section 59 (3) (b) of the Act.
This was after an exhaustive investigation by the Commission initiated in January 2020, following the Commission’s observations of a sustained increment of cement prices from an average of K55 to K100 per 50Kg bag between July 2019 and January 2020.
The Board of Commissioners determined that the sharing or exchange of commercially sensitive information relating to future prices and rebates by Mpande Limestone Limited, Dangote Cement Zambia Limited and Lafarge Zambia Plc amounted to an agreement.
The Board of Commissioners further determined that this agreement was anti-competitive as it was used to fix the price of cement and share markets contrary to Section 9(1) (a) and (b) of the Act respectively.
