[Intl-tobacco] Zimbabwe OKs Rothmans/BAT Merger

[Robert Weissman]

Nod for Rothmans, BAT merger

 Financial Gazette
 February 17, 2000
 By Staff Reporters

 Harare - Zimbabwe's Industry and Trade Competition Commission this week
gave
 approval to the proposed merger between Rothmans of Pall Mall (Zimbabwe)
 Limited and British American Tobacco (BAT) Zimbabwe Limited after it
satisfied
 itself on the conditions of the union.

 This paves the way for the two companies to follow in the footsteps of
their parent
 groups Rothmans International and British American Tobacco Plc which
finalised
 their merger deal last year. The commission's director, Alexander Kububa,
this
 week said the two firms agreed with the conditions imposed by the
commission
 and the body would keep the companies under a close watch.

 "The merging companies must make genuine efforts which will be closely
 monitored by the Competition Commission to dispose of certain identified
 cigarette-making equipment owned by BAT Zimbabwe to any third party other
than
 Rothmans who may want to enter the local cigarette-making industry by May
31
 2000," Kububa said.

 The other condition is that upon consummation of the planned merger, the
factory
 prices of all the cigarette brands produced by the two must not suddenly go
up.
 Any future increases shall be subject to close surveillance of the
commission as
 long as the monopoly situation created by the merger exists.

 "In considering the merger application, the Competition Commission found
out that
 while the merger creates a monopoly situation in the manufactured
cigarettes
 sector of the tobacco products industry, it has considerable efficiency
gains and
 public interest benefits that satisfy the requirements of the Competition
Act of
 1996," he said.

 The commission has to approve all company mergers in Zimbabwe.

 The commission was established two years ago to encourage and promote
 competition in all sectors of Zimbabwe's economy, to reduce barriers to
entry into
 any sector of the economy, as well as investigating restrictive business
practices.

 Copyright (c) 2000 Financial Gazette.