The Competition Commission has put a stop to a proposed transaction that would have seen Netherlands-based Akzo Nobel acquire South Africa’s paint manufacturer Kansai Plascon Africa (Kansai).
A multinational company based in Amsterdam, Akzo Nobel manufactures paints and performance coatings for both industry and consumers worldwide. The company conducts its activities in more than 80 countries including South Africa and employs over 32 000 people, and Dulux is its flagship brand.
It has three manufacturing plants in South Africa – in Alberton and Vanderbijlpark in Gauteng, and in Umbogintwini in Kwa-Zulu Natal, its largest plant in the country.
Kansai has a presence in 12 countries in Africa, raking in the revenue of about €280-million (R5-billion).
The competition watchdog said the two companies failed to convince it that the merger will not go against competition.
“The commission also found that the merging parties are close competitors in terms of price, quality, and product range, and the merger would remove competitive rivalry between two notable brands, thus reducing consumer choice,” said Siyabulela Makunga, spokesperson of the Competition Commission.
“The merging parties did not provide evidence of merger-specific technological, efficiency, or another pro-competitive gain that will be greater than and offset the effects of the prevention or lessening of competition arising from the proposed transaction, nor substantially weighty public interest commitments that would outweigh the competition concerns.”
News of the commission prohibiting the transaction will come as a blow to Akzo Nobel, which in June said Kansai’s activities in the region will “help us to further expand our paints and coatings business in Africa and provide a strong platform for future growth”.
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