Competition and Tariff Commission (CTC) penalised Intercape Ferreira Mainliner (Pvt) Ltd and Pathfinder Luxury Coaches (Pvt) Ltd over RTGS$75 thousand for violating the merger provisions.
CTC says the merged parties did not fully cooperate with the Commission as they delayed in responding to its responses.
“In light of the analysis, the Commission approved the merger and resolved to penalise the merger entity RTGS$75 970 for violating merger notification provisions,” CTC says in its annual report.
“The parties were not cooperative during the examination of the transaction and it took the company 5 years to finally comply with the notification.”
The commission’s analysis reveals that the amalgamation between the South African registered Intercape and Pathfinder affected the Zimbabwean luxury coaches since the merger resulted in a loss of market share.
“The merger did not lead to any changes in the market structure since the merged entity is struggling to adhere to its former timetable and standards,” CTC says.
“Pre-merger, Pathfinder’s performance was strong but post-merger erratic service resulted in a weak performance, which led to a significant loss in market share.”
“… since the transaction was a post-merger assessment, the parties contravened the provisions of section 34A of the Competition Act [Chapter 14:28] which empowers the Commission to impose a penalty on the merged entity,” CTC explains.
Luxury coaches Intercape and Pathfinder, in 2015, entered a joint venture involving a 50-50 shareholding agreement in which both parties contributed an equal number of assets.
The Tariff Commission, which analyses and approves business deals between Zimbabwean and foreign companies says it received a full notification of the post-merger transaction in 2018.