The Competition Commission has recommended that the Competition Tribunal approve the proposed merger between Takatso Aviation and South African Airways (SAA) subject to divestment and labor conditions. (Delwyn Verasamy/M&G)
youthe Competition Commission has recommended that the Competition Tribunal approve the proposed merger between Takatso Aviation and South African Airways (SAA) subject to divestment and employment conditions.
The condition of sale means that Global Aviation, the operator of low cost airline LIFTwill have to leave the takatso company. In a statement, the commission said that if the merger goes through with Global Aviation and Syranix, which co-owns the LIFT brand, as minority shareholders of Takatso, the deal with SAA would reduce competition in the market from the domestic airlines of passengers.
“Takatso will have access to SAA’s competitively sensitive information by virtue of his controlling interest in SAA, pursuant to the proposed merger. This concern is exacerbated by the fact that the domestic passenger airline market is highly concentrated, barriers to entry are high, and it is susceptible to coordinated effects,” he said.
“To remedy this concern, the commission and the parties have now agreed to a divestiture condition under which Global Aviation and Syranix will fully divest Takatso prior to implementation of the merger.”
The competition watchdog said it considered this fix-it-first remedy appropriate in the circumstances given the scope of the concerns identified.
The parties initially rejected the divestment and terms of employment, resulting in the commission’s initial decision to recommend a ban on the merger. number of employees in SAA”.
The commission said the merger does not raise any other substantial public interest concerns, so the competition court now he would consider their recommendations and make a decision on the deal.
the deal has been dogged by controversy since the department for public companies announced two years ago that it had chosen the Takatso consortium as its equity partner to take over 51% of SAA, which had been placed under corporate bailout.