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Easigas, Reatile merger gets conditional green light

Easigas, Reatile merger gets conditional green light

Photo by Reuters

10th December 2015

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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The Competition Commission has approved, with conditions, a proposed tie-up between liquefied petroleum gas (LPG) suppliers Easigas and Reatile Gaz.

The duo aimed to merge their respective Southern African operations to create a “truly regional player” with improved efficiencies and reliability of supply to customers through the companies’ combined LPG supply and distribution infrastructure.

Easigas parent company Rubis Group would hold a 60% interest in the merged entity, with Reatile Gaz holding the balance, in a deal that the commission believed would result in a “significant prevention or lessening of competition” in the market.

The commission, however, found that the transaction would dilute historically disadvantaged South African (HDSA) ownership in the LPG market and placed a condition on the merger that the parties ensure sufficient HDSA representation on the board of directors and executive committee of the new entity.

“Reatile is majority-owned by HDSAs. Post-merger, Reatile will be a minority shareholder in the merged entity, which will not be majority-owned by HDSAs,” the commission said in a statement on Thursday.

The conditions placed on the transaction would also ensure Reatile’s strategic involvement in certain key decisions to “mitigate against the removal” of Reatile in the LPG market.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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