Competition Commission on how the pandemic impacted M&As in SA

The COVID-19 pandemic has left a lasting impact on the business environment, with restrictions and economic challenges hindering the ordinary course of business. Despite the uncertainties and disruptions, there is an anticipated uptick in Mergers and Acquisitions (M&A) activity. Tamara Paremoer, Divisional Manager for Mergers & Acquisitions at the Competition Commission, shed light on the trends and implications of M&A activity in South Africa. The Competition Commission has witnessed a significant increase in M&A notifications, with a notable rise in cases citing COVID-related distress as a contributing factor. In the first three quarters of the financial year, the Commission saw a variation in the number of mergers, starting with a lower number in the first quarter but experiencing a substantial uptick in the subsequent quarters. The third quarter of 2020 saw a 18% increase in mergers compared to the previous period, demonstrating resilience amidst the challenges of the pandemic. Companies across various sectors have come together to weather the economic storm, with some citing COVID as a catalyst for consolidation. Retail, manufacturing, wholesale trade, and consumer goods sectors have been active in M&A deals. The Competition Commission remains vigilant in ensuring that these transactions do not undermine competition in the market. Despite the short-term financial challenges faced by many firms, the Commission looks towards a more competitive economy in the medium to long term. With a focus on assessing the lasting impact of M&A transactions, the Commission aims to maintain a level playing field in South Africa's competitive landscape. By scrutinizing each case and considering alternative solutions, the Commission strives to uphold competition and prevent any anti-competitive practices that may arise from increased M&A activity.