Watchdog says Brenntag merger must include disadvantaged people

This week, the Competition Commission demanded that the massive Dutch chemicals company Brenntag Group grant historically disadvantaged people (HDPs) more influence in exchange for its acquisition of Chemgrit Cosmetics and its affiliate businesses.

 Chemgrit Cosmetics is a chemical distribution and trade firm situated in South Africa. The company’s primary focus is on distributing chemical raw materials to the water treatment, coatings, plastics, cosmetics, and related industries.

 Brenntag is the industry leader in the distribution of chemicals and additives worldwide.

 According to the commission, to allay concerns about the public interest, the merging parties will, subject to reasonable commercial terms, hire the services of at least 20 HDP-owned companies for a predetermined amount of time to provide sub-distribution services to the combined company.

“In addition, the merged entity will provide a discount of at least 10% off the list price of all products sold to all HDP-owned businesses that are engaged by it as sub-distributors,” the commission said.

“For a pre-determined period following the implementation of the merger, the entity shall outsource all its water treatment testing requirements in South Africa to an HDP-owned business, provide interest-free business loans to qualifying HDP-owned companies that want to join, grow or penetrate the South African chemicals industry and that satisfy the credit and selection standards. They should also offer technical support to two or more HDP-owned companies looking to join the market.”

 In the meantime, the commission authorised the partnership between African Power and Puma Energy South Asia.

Puma is a wholesaler and retailer of refined petroleum products. Its activities include selling to retail, commercial and aviation clients as well as providing refined petroleum products at wholesale prices to businesses in the wholesale trade, mining, and agricultural sectors.

Additionally, Puma offers gasoline storage at three depots in Richards Bay and Mpumalanga.

African Power is the owner of MBHE O&M, a single company in South Africa. It also owns the following businesses in southern Africa: MBHE Zimbabwe, MBHE Zambia African Power Ltd and MBHE Energy Namibia Newco.

African Power provides commercial clients with solar photovoltaic solutions across a range of industries and locations, including manufacturing, hospitals, retail stores, heavy industries and mines. Additionally, it offers end-to-end services for designing, acquiring, supplying, installing, running, overseeing and maintaining solar power producing systems.

“The commission is of the view the proposed transaction is unlikely to substantially lessen or prevent competition in any market. To promote the greater spread of ownership, the merging parties have agreed to implement an HDP transaction post-merger. In addition, the proposed transaction does not raise further public interest concerns,” the competition tzar said.

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