COMESA fears emergence of monopoly in decorative coatings market, bars mergers

A merger which could have reduced consumers’ choice in the decorative coatings market in Zambia, Eswatini and Zimbabwe has been barred by the Common Markets for Eastern and Southern Africa (COMESA) Competition Commission.

The merger has been stopped on account that the parties involved were each other’s’ closest competitors in terms of price and quality, and it would have created significant market share accretion while reducing choice in the market for decorative markets.

Parties involved are AkzoNobel N.V of decorative coatings business of Kansai Plascon East Africa Proprietary and Kansai Platscon Africa Limited in Estwatini, Zambia and Zimbabwe.

Commission Director and Chief Executive Officer, Willard Mwemba, said in a statement on Friday that the Commission held that the remedies offered by the merging parties were not sufficient to address the concerns raised.

Mwemba observed that the merging parties were all active in the manufacturing and supply of decorative and industrial coatings in the common market.

“Within the industrial coatings market, the commission established that the transaction would not result to a significant market share accretion and therefore the transaction would not lead to any substantial lessening of competition. The merger was therefore approved in relation to the industrial coatings markets within the common market.

“Within the decorative coatings segment, the Commission observed that a distinction can be made between premium paints and medium to economy paints. The merger would have resulted in the creation or strengthening of market power in the broad market for decorative coatings,” he said.

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